MARKET REPORT: Russian sanctions breach propels payments firm Wise into the red

Payments firm Wise sank into the red yesterday after it breached UK laws imposed on Russia by allowing a person under sanction to withdraw £250 last year.

The money was taken out of a business account held with Wise in June 2022 and on a debit card issued in the person’s name who had been added to the sanctions list a day earlier. The person has not been named.

A report by the Treasury’s Office of Financial Sanctions Implementation (OFSI) said the issue, which the London-listed group flagged itself in July, was ‘moderately severe’.

Wise’s policy at the time allowed a customer, who was detected as possibly matching the profile of someone on the sanctions list, to continue to have access to their debit card given the high ‘false positive’ rates.

‘OFSI does not assess the breach as sufficiently serious to impose a monetary penalty on Wise,’ it said in a statement. 

Breach: Payments firm Wise was found to have breached UK laws imposed on Russia by allowing a person under sanction to withdraw £250 last year

However, the nature and circumstances of this breach were assessed as moderately severe and a disclosure is the appropriate and proportionate enforcement response.’

Wise closed all accounts with addresses registered in Russia in May last year, according to its website. Its shares fell 0.5 per cent, or 3p, to 640.2p.

The London stock market ended the final trading session of the week with the FTSE 100 falling 0.46 per cent, or 34.54 points, to 7439.13 and the FTSE 250 rising 0.22 per cent, or 41.18 points, to 18,605.17.

The blue-chip index fell nearly 3 per cent in August amid concerns about rising interest rates, soaring inflation and the health of China’s economy. IT group Kainos cashed in on clients investing in digital projects.

As a result, it expects to meet market forecasts for its financial year to the end of March 2024. Its share price dipped by 1 per cent, or 12p, to 1215p.

Grafton remained upbeat over its prospects even though the cost of doing business has soared and households are cutting back on spending to renovate their homes amid price rises and interest rate hikes.

The group, which owns the building materials supplier Selco, saw its profit plunge 29.3 per cent to £93.6million in the first six months of this year while revenue rose 3.2 per cent to £1.19billion.

Stock Watch – Sondrel

Sondrel crashed to a record low after the chip designer and supplier warned revenue will be far lower than hoped.

Scheduled production dates for three projects have been delayed by between six and 12 months amid rising inflation and weaker demand.

Revenues from the projects have been pushed back to 2024. Sondrel now expects to make at least £13million of revenue this year – below market forecasts. Shares, which listed at 55p in October 2022, fell 61.8 per cent, or 34.6p, to 21.4p.

Boss Eric Born said the results ‘underpinned a resilient performance in the face of challenging conditions during the first half’.

Grafton also launched a £50million share buyback programme.

Shares increased 0.8 per cent, or 7.1p, to 862.5p.

DiscoverIE, the customised electronics maker, completed its takeover of Newport-based Silvertel for £21million.

The deal was announced on August 1 and will see the newly acquired company, which makes parts that improve the efficiency of battery chargers, sit within its magnetics and controls division.

City broker Peel Hunt reiterated its ‘buy’ rating, given that Discoverie shares ‘look excellent’ ahead of the company’s upcoming trading update in October.

As a result, the shares added 1.1 per cent, or 8p, to 730p.

Mike Ashley’s retail empire tightened its grip over Boohoo after Frasers Group, which owns Sports Direct, Jack Wills and Flannels, by increasing its stake in the fashion brand to 9.1 per cent from 7.8 per cent.

Boohoo gained 7.5 per cent, or 2.49p, to 35.65p while Frasers Group climbed 1.3 per cent, or 10p, to 806.5p.

Harland & Wolff, the Belfast shipyard that built the Titanic, surged by 17 per cent, or 2.5p, to 17.25p after the company won a key legal ruling regarding its Irish gas storage project.

This post first appeared on Dailymail.co.uk