BUSINESS LIVE: Metro Bank shares plummet on fundraising reports; Competition watchdog to probe Amazon and Microsoft

Metro Bank is exploring options to raise as much £600million in debt and equity financing, reports suggest, as it works to bolster its balance sheet.

The bank’s shares are down 26 per cent in early trading, with losses nearing 50 per cent for the month.

Metro Bank was valued at £87million after the close on Wednesday. Its shares have lost about two thirds of their value since mid-February.

The fundraising could include more than 100 million pounds from selling shares, three of the sources said.

Metro Bank is also looking to refinance existing borrowings and is weighing otheroptions, such as asset sales, to reduce its funding needs, according to Reuters.

A firm behind beer-serving robots was set to make a bumper debut on the stock market in South Korea overnight – valuing it at over £1billion.

Doosan Robotics, the country’s largest maker of service robots, was due to list in South Korea’s biggest initial public offering of the year.

The FTSE 100 has recovered some ground this morning, tracking global peers in breathing a sigh of relief as a recent rout in bonds eased, though shares of Metro Bank have slumped following reports of an urgent capital raise.

The benchmark US 10-year bond yield has retreated from 16-year highs while the US dollar softened, relieving investor anxiety.

Metro Bank shares have slumped 26.7 per cent after press reports said the British mid-sized lender is in talks for an urgent capital raise to bolster its balance sheet.

People familiar with the situation told Reuters that Metro Bank was exploring options to raise as much as £600million.

Imperial Brands has gained 1.4 per cent after the cigarette maker announced a $1.34billion share buyback programme and reaffirmed its annual forecast.

Britain’s long-term borrowing costs surged to a 25-year high yesterday amid global market turmoil.

The yield paid on 30-year UK bonds hit 5.115 per cent, passing the level of a year ago in the wake of Liz Truss’s disastrous mini-Budget.

Richard Hunter, head of markets at Interactive Investor:

‘The sense of relief also permeated Asian markets overnight and followed through to the UK at the open. However, despite the bounce in opening exchanges, the FTSE100 remains a few points shy of breaking even for the year.

‘The switch from high growth stocks elsewhere globally has tended to be towards higher yielding bonds, as opposed to the dependable and somewhat defensive nature of the UK’s premier index.

‘Coupled with a seemingly intransigent view by international investors that the UK is lacking true appeal at present, any such pop in its share prices has of late tended to be of a temporary nature.

‘Indeed, the more domestically focused FTSE250 now finds itself down by 7% in the year to date on increasing concerns for the immediate economic outlook.’

National Grid expects annual earnings per share to be weighted more towards the second half of the year, with Britain’s energy systems operator confident of meeting full-year expectations.

The group, which also runs an electricity and gas business in New York and Massachusetts, said it expects operating profit to be broadly evenly split across the year for its UK businesses, but more heavily weighted towards the second half for its US ones.

National Grid expects 10 to 15 per cent of its New York business’s full-year operating profit to come in the first half ended 30 September, due to a higher non-cash environmental provision charge.

Britain’s biggest builder of homes for rent expects another record year for contruction, with the FTSE 250 group om trak for 1,600 units this year.

‘Our strong performance in delivering rental growth has continued through the remainder of our financial year. The team continue to deliver exceptional operational performance across all areas of the business and particularly in the completion and lease up of our new schemes.

‘Sales remain robust, valuations continue to demonstrate resilience, and our balance sheet remains strong. We continue to successfully execute on our growth plans which will see our post tax EPRA earnings double in the next three years.

‘We are delivering these new homes into one of the strongest occupational markets we have seen. Current leasing at our newly-opened schemes is exceeding underwriting and we continue to drive a step up in rental income across our national portfolio.

‘However, we remain mindful of protecting our customers’ rental affordability and, therefore, continue to ensure that rental growth across our portfolio moves broadly in line with wage inflation.’

Imperial Brands expects full-year profits to be in line with expectations, thanks to sustained demand, higher prices and strong adoption of tobacco alternatives such as e-cigarettes.

The company also announced a share buyback of £1.1billion.

The maker of Winston cigarettes and Backwoods cigars said its net revenue growth for tobacco products improved in the second half of the year, as higher prices helped offset the relatively steeper decline in volume when compared with historic averages.

The Government on Wednesday proposed banning younger generations from ever buying cigarettes, a move that would give the country some of the world’s toughest smoking rules and hurt the sales of major tobacco firms.

Tobacco shares suffered in the wake of the announcement.

Britain’s competition regulator will investigate US tech giants Amazon and Microsoft’s dominance of the UK cloud market, following an Ofcom probe that identified difficulties for UK businesses accessing or switching to multiple providers.

‘The CMA will now conduct an independent investigation to decide whether there is an adverse effect on competition, and if so, whether it should take action or recommend others to take action,’ Ofcom said in a statement.

Ofcom, which started looking into cloud services last year, had said in April it was particularly worried about the practices of Amazon Web Services (AWS) and Microsoft because of their market positions, and planned to ask the competition regulator to investigate.

UK businesses have told Ofcom they were concerned about it being too difficult to switch or mix and match cloud provider, Fergal Farragher, Ofcom’s Director responsible for the Market Study.

‘So, we are referring the market to the CMA for further scrutiny, to make sure business customers continue to benefit from cloud services,’ Farragher added.