Donald Trump has taken a $357m (£280m) hit as shares in his social media company dropped after the former president was found guilty of fraud.
Shares in Trump Media and Technology Group, the owner of Truth Social, fell by 6pc on Friday.
The drop knocks $550m off the company’s value. The Republican presidential candidate owns a 65pc stake in Truth Social that is believed to account for a majority of his net worth.
Trump’s stake is worth $5.6bn, although he is unable to sell any shares until September due to a lock-up agreement associated with the company’s initial public offering in March.
The drop in Truth Social’s shares is not as severe as might have been feared. They had fallen by as much as 14pc in closed-market trading immediately after Trump was found guilty of fraud on Thursday in his case involving “hush money” payments to a porn star.
Truth Social features similar functionality to X and was set up after Trump was banned from the social network, then named Twitter, shortly after the US Capitol riots of Jan 6 2021. It allows users to post short messages, or “retruth” them to share posts with others.
Elon Musk lifted the ban on Trump, once a prolific Twitter user, but the former president continues to exclusively use Truth Social, where he has 7m followers.
TMTG has said in regulatory filings that Trump being convicted could “negatively impact” the company. While Trump does not have a formal role at the company, a guilty verdict could mean Truth Social finding it harder to attract advertisers.
If it affects Trump’s chances of regaining the White House, it could also make the social network less influential. If Trump were to receive a prison sentence following his criminal conviction, he may be prevented from using the website.
Observers have said that the company’s valuation is largely disconnected from its financial performance, and partly driven by retail shareholders supporting Trump.
The company lost $327.6m (£256.6m) in the first three months of the year and had revenues of $770,500.
Despite Trump exclusively posting on Truth Social, Mr Musk is believed to have been regularly speaking to the former president, in part to encourage him to return to X, where his account still has 87m followers.
Mr Musk’s company is reportedly planning to host a video town hall event with Trump in the run-up to November’s US election.
TMTG is run by Devin Nunes, a former Republican congressman and close ally of Trump. The former president’s son, Donald Trump Jr, sits on its board.
Read the latest updates below.
Signing off…
Thanks for joining us on the Markets live blog this afternoon. Chris Price will be back on Monday morning ahead of the London markets opening to keep you up to date.
In the meantime, do check out our business coverage here.
European shares rise after US inflation data keeps Fed rate cut hopes alive
European shares rose on Friday, with the pan-European Stoxx 600 – which include some of Britain’s biggest companies – closing 0.3pc higher. But it still recorded a second week of declines as euro zone bond yields spiked to mirror their US counterparts on worries over interest rates remaining elevated.
The index was up for the month, however.
Data in the United States showed inflation tracked sideways in April, with the personal consumption expenditures (PCE) price index increasing 0.3pc last month, and up 2.7pc in the 12 months through April.
David Russell, global head of market strategy at TradeStation, said:
The PCE data confirms price increases aren’t as sticky as feared, keeping hopes of at least one [Fed] rate cut on the table.
Meanwhile, euro zone inflation picked up in May, a sign the European Central Bank still faces a slow and uncertain journey to rein in prices.
Samuel Zief, head of global FX strategy at JP Morgan Private Bank, said:
The upside surprise was primarily driven by services inflation, … that will be a cause for discussion at next week’s ECB meeting, but we don’t think it is a sufficient surprise to deter them from pressing ahead with a well-telegraphed 25 bps [basis points, otherwise known as a quarter point] cut.
Footsie closes up
The FTSE 100 closed up 0.5pc. Tge top riser was National Grid, up 4.7pc, followed by energy company SSE, up 2.3pc. The biggest faller was JD Sports, down 4.7pc, followed by Primark and Twinings tea owner Associated British Foods, down 4.7pc.
Meanwhile, the FTSE 250 rose 0.3pc. The top riser was vending machine company ME Group International, up 5.2pc, followed by Aston Martin, up 4.8pc. Ferrexpo, the miner, was the biggest faller, closing down 6.6pc, followed by North Sea engineering business John Wood, down 5.5pc.
Choppy trading in American shares after new inflation data
It’s a mixed picture in US stocks this afternoon, after the three main indexes opened up, before the S&P 500 and Nasdaq Compose made losses.
The S&P 500 is currently down 0.5pc, while the technology heavy Nasdaq Composite has falled 1.2pc. However, the Dow Jones Industrial Average of 30 leading American companies is up 0.1pc.
New data from the US Commerce Department showed inflation rose largely in line with expectations in April, fanning hopes that rate cuts were imminent from the Federal Reserve this year.
Marc Ostwald, chief economist and global strategist at ADM Investor Services International, said:
We shouldn’t go overboard. What we’ve got is after a few months of rising, [inflation] is finally going sideways and hopefully we’ll resume a downtrend as we go forward… but markets will be relieved because they are living in fear of bad numbers at the moment.
Magic circle law firm gives newly qualified lawyers a £25k pay boost in war for talent
A&O Shearman has become the latest magic circle firm to give newly qualified lawyers a £25,000 pay boost to £150,000 in a war for talent.
It follows the decision by magic circle rivals Freshfields, Linklaters and Clifford Chance to hit the £150,000 mark.
The magic circle is the traditional elite grouping of British law firms, which are in a war for talent against deep-pocketed US rivals.
A&O Shearman was formed at the start of May from the merger of Allen & Overy and Shearman & Sterling.
A month ago, Allen & Overy was reportedly intending to pay newly qualified lawyers £125,000 in London after its merger with Shearman & Sterling, rather than the £145,000 offering by Shearman.
Denise Gibson, A&O Shearman’s London managing partner, said:
Our compensation structure gives us flexibility to reward expertise, performance and wider contribution and is designed to be highly competitive to reflect the markets in which we operate.
Trainees and NQs [newly qualified lawyers] are a key part of the firm’s future and A&O Shearman provides unmatched opportunities for them to build successful careers.
Trump takes $357m hit as shares in Truth Social slump after guilty verdicts
Donald Trump has taken a $357m (£280m) hit as shares in his social media company dropped after the former president was found guilty of fraud.
Shares in Trump Media and Technology Group, the owner of Truth Social, fell by 6pc on Friday morning.
The drop knocks $550m off the company’s value. The Republican presidential candidate owns a 65pc stake in Truth Social that is believed to account for a majority of his net worth.
The drop in Truth Social’s shares is not as severe as might have been feared. They had fallen by as much as 14pc in closed-market trading immediately after Mr Trump was found guilty on Thursday night.
Mr Trump’s stake is worth $5.6bn, although he is unable to sell any shares until September due to a lock-up agreement associated with the company’s initial public offering in March.
Truth Social features similar functionality to Twitter and was set up after Mr Trump was banned from Twitter shortly after the US Capitol riots in 2021. It allows users to post short messages, or “ReTruth” them to share posts with others.
Mr Trump, once a prolific Twitter user, has been unbanned from the social network, now known as X. However, he continues to exclusively use Truth Social, where he has 7m followers.
TMTG has said in regulatory filings that Mr Trump being convicted could “negatively impact” the company. Receiving a prison sentence, for example, could see him prevented from using the social network.
Many observers have said that the company’s valuation is largely disconnected from its financial performance, and partly driven by retail shareholders supporting Mr Trump.
The company lost $327.6m (£256.6m) in the first three months of the year and had revenues of $770,500.
Paddy Power owner’s finance boss quits as gambling giant shifts listing to US
Flutter’s finance chief has quit after the gambling giant shifted its primary stock market listing to the US. Daniel Woolfson has the details:
The departure of Paul Edgecliffe-Johnson was confirmed by Paddy Power’s parent on Friday, which coincided with the company completing its move from London to New York.
Shares in Flutter fell by as much as 12pc following confirmation of the switch, which will see the business look to join American indices such as the S&P 500.
The move will also see the Dublin-headquartered company retain a secondary listing in London.
As for the exit of Mr Edgecliffe-Johnson, it comes just two years after he joined the business.
In light of the move to the US, Flutter said it had recently held talks with the departing chief financial officer (CFO) about his family commitments in the UK.
The company said: “Following this discussion, the board has concluded that it is in the Company’s best interests for Paul Edgecliffe-Johnson to step down from his role as group CFO and executive director.”
Mr Edgecliffe-Johnson, who joined it in 2023 after spending almost two decades at InterContinental Hotels Group, will be replaced by Rob Coldrake, Flutter’s international chief financial officer.
In recent years, the US has become an increasingly lucrative market for gambling companies after a Supreme Court decision in 2018 allowed states to start setting their own gaming laws.
Flutter already owns Fanduel, one of America’s biggest sports betting companies, which has ensured the US is its biggest global market.
Peter Jackson, Flutter’s chief executive, has previously called New York the company’s “natural home”.
![Flutter first began trading in New York in January via a secondary listing](https://www.telegraph.co.uk/content/dam/business/2024/05/31/TELEMMGLPICT000372793569_17171647757320_trans_NvBQzQNjv4BqpVlberWd9EgFPZtcLiMQf0Rf_Wk3V23H2268P_XkPxc.jpeg?imwidth=350)
Tesla cars failed to warn passengers seat belts were not secure
Tesla will issue a software update to more than 125,000 cars to fix a fault in which the vehicles’ seat belt warnings failed to work. James Titcomb reports:
The US National Highway Traffic Safety Administration (NHTSA), which handles safety recalls, said that an error meant that the cars would not alert drivers when they were travelling without wearing their seat belt.
Cars are required to sound alerts and give visual warnings when a car is moving without the driver’s seat belt being attached securely to the buckle.
The NHTSA said that the problem potentially affected 125,227 Model S, Model X, Model Y and Model 3 cars, or around 2pc of the Tesla vehicles on the road.
The fault had been discovered during safety tests by Tesla, and the company had identified 104 warranty claims by customers related to the issue.
The NHTSA said the problem was down to a faulty circuit on the driver seat sensor but could be corrected by a software update that will bypass the component.
Fixing the fault is referred to as a recall by US regulators but is accomplished automatically by an online software update.
![A Tesla Model S plugged into a Tesla Supercharger in the Virginia last year](https://www.telegraph.co.uk/content/dam/business/2024/05/31/TELEMMGLPICT000372497740_17171634526360_trans_NvBQzQNjv4BqpVlberWd9EgFPZtcLiMQf0Rf_Wk3V23H2268P_XkPxc.jpeg?imwidth=350)
Soho House rejects takeover approach
Soho House has told investors that it has rejected a takeover approach, after setting up a special board committee to “evaluate certain strategic transactions, which included potentially becoming a private company”.
The operator of a chain of private members’ clubs said that the offer “reflected a substantial premium over the current trading price”, but that it “did not adequately reflect the value of the company and was not in the best interests of its public stockholders”.
It did not name the prospective buyer.
Earlier this month, it released quarterly results showing that it had racked up losses of $46m (£36m), up from $16m a year earlier.
Soho House, which began life as a club on Greek Street in London, floated in New York in 2021, raising $420m. Shares have subsequently dropped 58pc.
![Soho House White City](https://www.telegraph.co.uk/content/dam/business/2024/05/31/TELEMMGLPICT000176974314_17171630269930_trans_NvBQzQNjv4BqOjwtMIBfBvsmIG0UzgZgYNGmygSMXx0F6kNOzUL6Gw4.jpeg?imwidth=350)
EU approves €2bn of Italian aid for chip factory in push to cut reliance on Asian imports
The European Commission has approved Italian state aid for chip giant STMicroelectronics to build a €5bn euro (£4.3bn) microchip plant in the country, as Europe battles to reduce reliance on Asian imports of vital components.
The French-Italian semiconductor maker’s proposed plant in Catania, Sicily, will receive a direct grant of about €2bn from Rome to make specialist microchips that boost energy efficiency in electric cars.
Massive supply chain disruptions during the pandemic and a rise in trade tensions with China have heightened scrutiny of Europe’s reliance on Asia for chip supplies, with recent disruptions on the Red Sea trade route adding to concerns.
With the United States also offering big incentives to try to attract chip manufacturers, the EU has responded with its own Chips Act, seeking to do the same for components vital to hi-tech industries from computing to carmaking.
EU antitrust chief Margrethe Vestager said the approved state aid demonstrates the bloc’s determination to ensure supply of such materials. She told a press conference in CataniaL
I think it’s really important that we do this, because it’s also signalling to the rest of the world, you should not build up capacity to think that you can own this market, because it’s so strategically important to us not to have single supplier dependencies.
STMicroelectronics is the only company that has so far received state aid grants under the EU’s Chips Act, as major projects announced by Intel and TSMC in Germany are still awaiting approval. Ms Vestager said that is set to change:
I’m absolutely sure that there will be more investments also in other states and I think they will also come relatively soon, but I cannot tell you [exactly when].
![Margrethe Vestager, EU competition commissioner, earlier this month](https://www.telegraph.co.uk/content/dam/business/2024/05/31/TELEMMGLPICT000376547656_17171622346410_trans_NvBQzQNjv4BqgsaO8O78rhmZrDxTlQBjdGLvJF5WfpqnBZShRL_tOZw.jpeg?imwidth=350)
Pandemic supply chain distruption still affecting airlines, says Delta boos
The boss of US airline giant Delta has told Bloomberg Television that supply-chain difficulties which developed in the wake of the Covid pandemic are still a problem for the airline industry.
Ed Bastian, chief executive, said:
The supply chain is not where it needs to be.
It’s significant. It’s not just Delta, it’s the industry …
The result is that repair times take months rather than weeks, he said, with manufacturers still being affected by less experienced staff and components not being easily available.
Last year, a manufacturing defect in geared turbofan engines made by Pratt & Whitney led to some airlines having to ground plans. Mr Bastian said that this is more significant that the effect of airline delivery delays by Boeing.
He said:
The engines are going to be a bigger issue, particularly for us the geared turbofan. That’s slowing down a little bit the new deliveries we can take, but its more engines than it is planes. What it’s causing us to do is maintain the existing fleet we have a little bit longer, and that’s another cost to the business.
![A Delta airlines airplane on approach to land at LaGuardia Airport in New York, 2022](https://www.telegraph.co.uk/content/dam/business/2024/05/31/TELEMMGLPICT000283176430_17171616567780_trans_NvBQzQNjv4BqYsmWvrrUa2K5zmnFcEH9LGT_qIFhynusRGXDkCblfg4.jpeg?imwidth=350)
Families put record amount of cash into Isas in anticipation of interest rate fall
Savers put away a record amount of cash into Isas last month in anticipation of a looming interest rate cut by the Bank of England. Eir Nolsøe reports:
Savers put away a record amount of cash into Isas last month in anticipation of a looming interest rate cut by the Bank of England.
Families deposited an extra £11.7bn into Isas in April, the highest since records began 25 years earlier, Bank of England data showed.
The sharp increase came as the central bank is expected to begin lowering interest rates from a 16-year high.
Inflation fell to 2.3pc in April, placing it within touching distance of the Bank’s 2pc target.
Overall, households put away an extra £8.4bn in savings last month when taking into account the impact of deposits and withdrawals.
This was the largest amount put away since September 2022, when former prime minister Liz Truss’s disastrous mini-Budget triggered market turmoil.
New American inflation figure casts doubt on swift interest rate cut
US inflation stayed the same in April, a worrying sign for the US Federal Reserve that suggests the elevated pace of price increases could last longer than expected and casts doubt on how soon it will be able to cut interest rates.
The personal consumption expenditures (PCE) price index increased 0.3pc last month, the US Commerce Department said on Friday, matching the gain in March.
The PCE price index is one of the inflation measures tracked by the Fed for its annual 2pc target. Monthly inflation readings of 0.2pc over time are needed to bring inflation back to target.
The Fed has kept its benchmark policy rate in the 5.25pc-5.50pc range for the past 10 months and was stung by three months of stronger-than-expected inflation and labor market readings from January to March after more encouraging readings in the fourth quarter of last year.
Truth Social shares climb despite guilty verdict
Shares in Donald Trump’s personal social media business Truth Social climbed as much as 5pc in pre-market trading on Friday as fans of the former president appeared undaunted after a US court found him guilty in a landmark hush money trial.
The recovery follows a rapid sell-off after the Mr Trump was found guilty, recouping losses from the immediate aftermath of the New York jury’s verdict.
Donald Trump vowed to “keep fighting” after he was found guilty of all counts in his New York hush money trial.
Mr Trump, 77, now faces possible jail time for falsifying business records to cover up payments made to adult film star Stormy Daniels. He will be sentenced on July 11, although this will not stop him running for president in November.
![Donald Trump speaks outside the courtroom after a jury convicted him of felony crimes for falsifying business records](https://www.telegraph.co.uk/content/dam/business/2024/05/31/TELEMMGLPICT000379953505_17171592995160_trans_NvBQzQNjv4BqpVlberWd9EgFPZtcLiMQf0Rf_Wk3V23H2268P_XkPxc.jpeg?imwidth=350)
After the verdict was delivered, US billionaires including Elon Musk and Bill Ackman Tweeted posts criticising the decision.
Google restricts its new AI search engine
Google has limited what search results are answered by its artificial intelligence (AI) systems after they resulted in a string of errors including claiming Barack Obama was a Muslim, James Titcomb reports.
The company said it was adding new restrictions to its “AI overview” feature, which provided AI summaries of answers to search queries.
This includes limiting the number of health-related queries that will be answered by AI, restricting the types of website used by the system, and introducing restrictions where the AI answers were deemed unhelpful.
Google unveiled the AI overview feature earlier this month and introduced it widely in the US last week before a planned worldwide launch later this year.
UBS finally completes Credit Suisse forced merger
The long, painful process of merging UBS with its erstwhile rival Credit Suisse is finally complete, the Swiss bank said on Friday.
“The completion of the merger within the expected timeline was facilitated by the strong support from regulators across the globe,” UBS said.
The $3bn merger came amid a crisis at Credit Suisse last April, which faced a flood of withdrawals by its wealthy clients and a series of scandals, and was pushed through by Swiss regulators.
The deal brings to an end the independent existence of Credit Suisse, which was founded in 1856.
FTSE 100 up 0.4pc at lunchtime
The FTSE 100 is up 0.4pc just after midday and is set to end May on a high after falling from a record high earlier this month.
The blue chip index is down about 2pc from a record high point on May 15, but has staged a minor recovery after a week of daily falls around the Bank Holiday.
The FTSE 250 is broadly flat so far today.
Mike Lynch: The CEO doesn’t do the accounting
Overnight in San Francisco, British technology tycoon Mike Lynch told a US court on Thursday that there were limits to what he knew as boss of the software company Autonomy, as he sought to defend himself from charges of fraud. Alex Singleton reports:
During his latest evidence session, Mr Lynch repeatedly claimed he did not understand some of the spreadsheets he was given as chief executive, distancing himself from allegations of impropriety.
He told the court: “The CEO doesn’t do those things, you don’t do the accounting, you don’t do the customer support . . . You have a department that does [those things] and you set a culture for what you want them to do.”
Mr Lynch was on the witness stand in San Francisco defending himself against claims he was the “driving force” behind a criminal scheme to inflate Autonomy’s revenue prior to its takeover by HP. He has pleaded not guilty.
Read the full story: Mike Lynch seeks to downplay role in alleged Autonomy fraud
Thames Water warns hundreds of Surrey residents not to drink tap water
Thames Water has been forced to warn 600 Surrey residents not to drink the local tap water.
The embattled water supplier told residents of Bramley to avoid the local water after conducting tests following a previous fuel leak in the area.
Jeremy Hunt, who was MP for the local area until the dissolution of parliament, said: “I have requested bottled water stations are in Bramley itself – they are being set up now.”
Tess Fayers, Thames Water’s regional operations director, told BBC Radio Surrey the issue was “linked to an issue with a fuel leak which has been plaguing the town of Bramley for quite some time”.
Lady Bamford’s Daylesford hit by mounting losses
Lady Bamford’s farm shop business Daylesford Organic plunged to a £3.6m loss last year, as shoppers shunned its upmarket products, Hannah Boland writes:
Daylesford, one of Britain’s best-known organic farm retailers, revealed it fell further into the red in 2023, as losses shot up from £291,000 a year earlier.
The company said deepening losses stemmed from a “tough trading environment”, as it was impacted by a raft of inflationary pressures.
It came as revenues also stalled across the business last year, ending a prolonged run of growing sales.
The business said revenues rose just 2pc in its latest financial year to £50.2m, compared to 15pc growth a year earlier and a 27pc jump in the year to March 2021.
French inflation climbs for first time this year
French inflation increased for the first time this year, climbing to 2.7pc in May from 2.4pc the previous month, as Europe’s leading economies drove price rises across the bloc.
Energy costs climbed by 5.8pc, Insee said, while services inflation slowed slightly from 3pc to 2.7pc.
‘The odds still favour a cut’
Despite Eurozone inflation edging up in May, some economists believe a rate cut is still most likely at the next ECB meeting. That at least is the take of Mohamed El-Erian.
Meanwhile, ING’s chief economist Peter Vanden Houte says the disappointing figures make a more hawkish statement more likely.
Meanwhile, Matthew Ryan of global financial services firm Ebury, adds: “Today’s data will provide somewhat of a headache for Governing Council members, and will no doubt cast fresh uncertainty over the path for ECB rates.
“While we still expect the bank to follow through with a 25 basis point rate cut at its June meeting next week, we are now likely to see a relatively less dovish set of communications that both flag disquiet over inflation, while hinting no immediate rush to ease policy again.”
Mortgage approvals take a dip
Mortgage approvals dropped slightly in April, down to 61,100 compared to 61,300 in March, while remortgages also fell from 33,500 to 29,000.
However, the amount being borrowed by individuals climbed, increasing to £2.4bn compared to £0.5bn in March.
The actual interest rate paid on new mortgages stood at 4.74pc, up by 1 basis point.
Labour shows off Great British Energy
Labour politicians have been doing the morning rounds showing off the new logo and website for Great British Energy – the party’s plan for a state-owned clean power producer.
The opposition’s shadow technology spokesman Peter Kyle has been on broadcasters promoting the plans while Ed Miliband has been pushing the proposals on Twitter.
However, there are concerns over where funding for the national energy company will come from.
The publicly-owned energy company will receive £8.3 billion of funding over the first Parliament, which Labour has said would be paid for by its proposed extension of the oil and gas windfall tax.
The Conservatives have criticised the plans as an “unfunded promise” and pointed to analysis by Stifel which found Labour’s windfall tax would only bring in £6.5 billion of additional tax by 2030.
Border Force strike to disrupt Heathrow
Hundreds of Border Force officers have begun a three day protest at Heathrow this morning in a row over their new work schedule.
The Public and Commercial Services Union said more than 500 members would take part in strike action at Heathrow terminals 2, 3, 4 and 5.
The union said yesterday: “The officers, who work in terminals 2, 3, 4 and 5, took 4 days’ action last month. They are taking action after managers imposed a new roster that has seen more than 250 staff losing their jobs or being moved on to other work against their will.
“Those who remain are struggling with longer shifts, inflexible shift-swapping rules, no clarity on booking leave and no way to work around caring responsibilities.”
The Home Office has said it has “robust plans to minimise disruption and keep the border safe and secure”.
FTSE morning wrap
JD Sports was leading the fallers on the FTSE 100 this morning, briefly over 12pc in the red after reporting a drop in UK sales in the first three months of the year.
Shares in Flutter, meanwhile, were down 7pc – and at one stage crumbling as much as 15pc before recovering. The bookie surprised the market announcing its chief financial officer, Paul Edgecliffe-Johnson, would be stepping down over family commitments. Flutter has just completed swapping its primary listing to the New York Stock Exchange.
Also down is Primark-owner Associated British Foods, down 3.8pc, after a key investor sold shares at a discount.
On the other end, Centrica shares were up over 4pc after analysts at RBC gave the energy provider a glowing report.
China suffers surprise manufacturing slump
A shock fall in Chinese manufacturing activity has prompted calls for Beijing to unleash more stimulus to support the economy, our Economics Editor Szu Ping Chan writes.
New factory orders shrank in May, led by a drop in activity among small and medium-sized businesses as overseas demand also faltered. Economists said the country’s property crisis continued to weigh on confidence among households and businesses as non-manufacturing activity also slowed.
The National Bureau of Statistics (NBS) said its official manufacturing purchasing managers’ index (PMI) fell to 49.5 in May from 50.4 in April. This is below analysts’ forecasts and the 50 level that divides growth from contraction.
Xiangrong Yu, an economist at Citi, said the closely-watched survey suggested the world’s second largest economy was in the grip of a deeper malaise.
“Persistent demand weakness seems to [be] eroding production strength,” he said. Mr Yu suggested that interest rates should be cut and more government stimulus deployed to prop up demand.
“The government has shot multiple arrows again to stabilise the property sector, but efforts will likely need to be scaled up,” he added.
Kelvin Lam at Pantheon Macroeconomics said the fallout from China’s debt-fuelled property crisis had cast a long shadow over the economy.
Mike Ashley’s Frasers builds £300m Hugo Boss stake
Mike Ashley’s stake building in Hugo Boss has continued with Frasers Group snapping up more shares in the languishing German fashion retailer.
Frasers said it had increased its position in Hugo Boss to £305m after a fall in the German business’s share price.
Shares in Hugo Boss are down 27pc so far this year having dropped 13pc last week in a single day after reporting weak trading in China.
Last week, Mr Ashley entertained fashion bosses including executives from Hugo Boss at Cholmondeley Castle in Cheshire.
JD Sports shares tumble 8pc on “challenging” market
Shares in FTSE 100 sportswear retailer JD Sports have dropped 8.5pc so far this morning – the biggest fall among the blue chips in early trading – as the business blamed a “volatile” market for a fall in profits.
JP Sports reported sales growth of 9pc over the year, but its profit before tax fell by 8pc to £973.9m. The business also said its first quarter UK sales were down around 6.4pc.
Régis Schultz, JD Sports chief executive, said:
We have started the new financial year with Q1 in line with our expectations in a volatile market and we are on track to deliver our profit guidance for the full year. Looking further ahead, we have a strong business model and a clear strategy to deliver long-term growth and value creation for our shareholders.
Nationwide’s Virgin Money merger faces investigation
Nationwide’s £2.9bn takeover of Virgin Money is facing scrutiny from Britain’s competition watchdog, Michael Bow reports
The Competition and Markets Authority (CMA) confirmed on Friday morning that it will examine the acquisition for potential anti-trust concerns, setting a deadline of July 26 to make its initial decision.
Its range of options includes clearing the deal after a so-called first phase review, which lasts two months, or prolonging the investigation for a lengthier in-depth probe.
Interested parties will be able to submit their views on the agreement until 14 June.
Nationwide agreed to buy Virgin Money earlier this year in a £2.9bn all-cash agreement, in what is the largest takeover in Britain’s banking sector since the financial crisis.
Shareholders in Virgin Money, including Sir Richard Branson’s Virgin Group, last week approved the deal at a shareholder vote.
By contrast, some Nationwide members have complained they have been deprived of a say on the matter, with the building society refusing to give them a vote.
Treasury offloads £1.2bn in NatWest shares
The Treasury has sold off a further £1.2bn in NatWest shares, reducing the taxpayer stake in the bank to 22.5pc.
The share sale comes after a planned retail offering for a major stake in the bank was scrapped after Rishi Sunak called a General Election.
The future of the share offer is now in doubt, with both parties expected to review the state of the market after the election before deciding to proceed with the deal.
‘Cautious support’ for Tesla’s move to Texas, says ISS
While shareholders have been urged to push back on Mr Musk’s $56bn pay deal, one crucial measure has investor support.
The billionaire wants to reincorporate Tesla in Texas and leave Delaware after a judge in the state tore up his pay award.
ISS said it had “some concerns regarding the determination process of the board and risks given the unknown application of
Texas business courts in practice.
“However, it is not readily apparent that the rights of shareholders would be materially harmed as a result of the reincorporation.”
While the vote on Mr Musk’s pay deal is not binding – although defeat would be highly embarrassing for Mr Musk – the planned move to Texas requires approval from shareholders.
House prices bounce back in May
House prices climbed in May for the first time in three months, despite borrowing costs remaining stubbornly high, according to Nationwide data.
Average prices increased 0.4pc from April, the mutual found, beating economists forecasts of closer to 0.1pc.
While interest rates have remained at their highest levels in over a decade, consumer confidence has been growing and wages are rising.
“The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months,” said Robert Gardner, chief economist at Nationwide.
“Consumer confidence has improved noticeably over the last few months, supported by solid wage gains and lower inflation.”
Nationwide said it did not expect the general election to play into house price movements, with wider economic movements more likely to have an impact.
“Past general elections do not appear to have generated volatility in house prices or resulted in a significant change in house price trends,” says Gardner.
Tesla shareholders urged to reject Musk’s pay deal
Elon Musk’s eye-popping $56bn share deal is facing a growing investor revolt after a second major shareholder adviser called on clients to reject the pay deal.
In a report for investors, Institutional Shareholder Services (ISS) rejected Musk’s pay offer – the biggest in US history – as “excessive” and “outsized”.
The pay award was originally waved through by shareholders in 2018, but one investor took the company to court and the deal was found to be unlawful by a US judge.
Tesla has now put the pay agreement to another vote, but the company’s increasingly gloomy outlook at Mr Musk’s erratic behaviour have triggered scepticism from some shareholders.
Here is what ISS said:
Support for the ratification of CEO Musk’s 2018 performance stock option award (Item 4) is not considered warranted. Although the achievement of the grant’s performance hurdles and the substantial growth in the company’s size and profitability are fully recognized, the award value was considered outsized from the start and it has failed to accomplish certain of the board’s stated objectives from 2018.
Some investors may find the board’s argument compelling, that it would be unfair for CEO Musk not to receive the award, which was previously approved by shareholders, and after achieving
the high performance hurdles. However, the concerns raised, both back in 2018 and in the interim, have not been sufficiently mitigated.
Good morning
Tesla is facing a spiralling investor revolt over Elon Musk’s $56bn pay deal. Elsewhere, the Treasury has sold shares in NatWest to the tune of £1.2bn, further reducing its stake, and UK house prices made a recovery in May.
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What happened overnight
On Wall Street, the S&P 500 dropped 0.6pc, to 5,235.48, while the Dow Jones Industrial Average of 30 leading US companies fell 0.9pc, to 38,111.48. The Nasdaq Composite index lost 1.1pc, to end the session at 16,737.08.
The yield on benchmark US 10-year Treasury bonds fell to 4.548pc, from 4.624pc late on Wednesday.
Hong Kong stocks rebounded on Friday morning after three days of losses, helped by data indicating the US economy grew slower than expected in the first quarter.
The Hang Seng Index climbed 0.98pc to 18,409.62, the Shanghai Composite Index edged up 0.10pc to 3,094.76, while the Shenzhen Composite Index on China’s second exchange was marginally higher, inching up 0.72 points to 1,726.85.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.55pc, pushing away from the three-week low hit on Thursday. The index is set for a 1.4pc decline for the week but is up 2.7pc in May, rising for the fourth straight month.
Japan’s Nikkei was up 0.20pc and is flat for the month.
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