PM update: Shell buys First Utility, FTSE 100 hits all-time high, Toys R Us saved – for now

Shell has broken into the UK household energy market by snapping up First Utility (more below). In the US stocks got more of shove higher – the Dow was ahead +0.40% at 3.30pm – thanks to the lingering after-glow of Donald Trump’s tax reform bill. 

There was a bit of cheer also from the latest US GDP third quarter numbers. Though growth was revised down to +3.2% from +3.3% it is still a robust performance given the battering a hurricane-hit US economy took from July to September. 

“Personal consumption expenditures increased less than previously estimated, but the general picture of economic growth remains the same,” the US Bureau of Economic Analysis said in a briefing. 

Earlier Ryanair confirmed it will recognise pilot union Impact, thereby swerving a strike threat over Christmas from Irish airports. Ryanair shares were down -0.43% at €15.08 though this is a recovery from Monday’s €14.20 level. 

Christmas glad tidings arrived in the nick of time for Toys R Us which has stemmed a collapse following a new rescue plan. The deal is pinned to a company voluntary agreement (one step removed from a plunge into administration). There are no immediate job losses but it’s likely 800 jobs will go sooner rather than later. 

The pound was down further today at 1.3349, a -0.27% slip while the euro was lower also against the dollar, down -0.16% at 1.1859. 

• UK FTSE 100 7,603.98 +1.05%
• DAX 13,088.01 +0.14%
• CAC 40 5,370.72 +0.34%
• Dow 24,821.54 +0.38%
• S&P 500 2,685.89 +0.25%
• Nasdaq 6,970.65 +0.14%
• Nikkei 225 22,866.10 -0.11%
• Gold 1,267.80 -0.14%
• Oil WTI 57.72 -0.64%

Shell sure of UK energy market profits – despite price caps threat

Shell confirmed earlier it had bought itself a presence in the UK energy market. The oil giant has snapped up First Utility for an undisclosed sum. Clearly Shell wants to widen its ‘downstream’ exposure as opposed to the ‘upstream’ oil extraction business. 

“The Shell group’s energy supply, trading and marketing expertise, combined with First Utility’s experience in serving around 825,000 homes in the UK, will enable First Utility to grow and develop more innovative services for customers,” said the oil company in a release.

However Shell is getting into the household market at a time when the price competition is formidable and there is the real threat of government-enforced price caps. 

First Utility is privately owned. Until recently it had been mulling a stock market flotation. The Shell relationship is not new. First Utility has been supplying its 825,000 customers with Shell energy for some time.

FTSE 100 hits record high but the performance is weak compared to other bourses: Shutterstock

UK 'Santa rally' gets underway – FTSE hits 7,600 – but rivals are ahead

Strong performances from mining stocks saw the FTSE 100 sail past the 7,600 threshold earlier to an all-time high of 7,609. The FTSE 250 was also up though the +0.36% rise was rather more modest. 

The FTSE 100 rise is though proportionately small compared to previous Christmas stock market surges not to mention the performance of other jurisdictions this year. The FTSE 100 is up around +6.5% year-to-date.

Compare that with the Dow Jones, up more than +23% and the Hang Seng, up +30%, this year. In other words, overseas market exposure needs to be taken seriously. 

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