AUS
NZ
UK
CA
USA
IND
Highlights:
- Investment Summit: UK Prime Minister Keir Starmer promotes business investment at a London summit, promising to remove bureaucratic barriers.
- Gambling Stocks Hit: Shares in major gambling firms, including Entain and Flutter, plunged on concerns about a potential tax raid.
- Oxford BioDynamics Falls: Shares drop 54% as the firm announces a strategic review and warns of the need for additional funding by 2025.
London’s FTSE 100 index closed higher on Monday as Prime Minister Keir Starmer sought to attract global investment, declaring the UK open for business. However, the day was bleak for gambling firms, with shares tumbling on news of a potential tax hike that could heavily impact the industry.
The FTSE 100 climbed 0.5%, closing at 8,292.66, while the FTSE 250 rose 0.3% to 20,817.19. European markets also followed suit, with the CAC 40 in Paris and the DAX 40 in Frankfurt both posting gains.
UK Government Seeks Investment Boost
At an investment summit in London, Starmer called for global investors to help jumpstart the UK economy, promising to clear bureaucratic hurdles and prioritize growth. He stressed that the UK is open for business following the political turmoil after Brexit, and deals worth billions are expected to be finalized during the summit.
Starmer also dismissed reports suggesting the UK government might raise capital gains tax to 39%, calling the speculation "wide of the mark."
Currency and Market Movements
The pound slipped slightly, closing at $1.3052, compared to $1.3074 on Friday. The euro and the yen also showed modest movements, with the euro standing at $1.0910 and the dollar rising against the yen to JP¥149.83.
US markets saw positive movements, with the Dow Jones, S&P 500, and Nasdaq Composite all showing gains of 0.3% to 0.6%.
Gambling Stocks Plunge on Potential Tax Raid
Reports from The Guardian suggested that the Treasury might be considering tax proposals that could generate up to £3 billion from the gambling industry, leading to a sharp decline in gambling stocks. Proposals from the Institute for Public Policy Research (IPPR) and the Social Market Foundation (SMF) could see taxes on high-street bookmakers and online operators double, raising concerns about the sector’s profitability.
Entain, the owner of Ladbrokes and Coral, saw its shares fall 7.7%, while Evoke, owner of William Hill, dropped 13%. Shares in Flutter Entertainment and Rank also declined by 5.6% and 3.2%, respectively.
Citi and Jefferies Weigh In
Citi analysts believe such a drastic tax increase is unlikely but noted that incremental tax hikes on the industry are possible. Jefferies warned that the proposed tax increases could severely damage bookmaker profitability in the UK.
Other Market Movers
Bunzl shares rose 2.4% after an upgrade from JPMorgan, while Mulberry surged 12% following news that its largest shareholder had rejected a takeover offer from Frasers Group. In contrast, international recruiter PageGroup fell 0.8% after reporting challenging market conditions and a 14% drop in gross profit for the third quarter.
Oxford BioDynamics saw its shares plunge by 54% after announcing a strategic review and a warning that it would need additional cash resources by early 2025. The firm is considering various funding options, including asset sales and cost-saving measures.
Tuesday’s calendar will feature results from housebuilder Bellway and updates from companies like Wise and Reach. Additionally, UK unemployment and average earnings figures are set to be released, along with eurozone industrial production data.
