BUSINESS LIVE: HSBC to sell Argentine business; BP production boost; Imperial Brands lifts guidance

Higher interest rates have led to higher mortgage costs for many – especially those who have remortgaged over the past 18 months.

Over the course of 2024, 1.6 million mortgage borrowers will roll off their cheaper fixed rate mortgages, according to UK Finance – many of whom will currently be on a rate of 2 per cent or less.

‘We’re trying to make the best out of a broken system,’ says Tillie Peel, founder of the The Pop-Up Club, a business on a bold mission to save and revolutionise the high street.

‘The costs that are involved in having a retail space are insanely high.’

HSBC faces a $1billion pre-tax loss from a planned divestment from its business in Argentina, as the lender continues to refocus its operations on Asian operations.

Europe’s largest bank told investors on Tuesday that it has agreed to sell the Argentine business to domestic financial services firm Grupo Financiero Galicia for $550million (£434million).

Oil supermajor BP has lifted guidance for oil and gas output during the opening three months of this year, but warned of a hit from lower prices.

The FTSE 100 giant forecasts upstream production to be larger in the first quarter of 2024 than in the previous three months.

Amazon shares touched an all-time high last night ahead of a bumper earnings season for Big Tech that could generate profits of more than £90billion.

Shares in the e-commerce and cloud computing behemoth rose more than 1 per cent to a high of $187.29 before closing at $185.19.

Borrowing costs rose on both sides of the Atlantic as investors scaled back bets on interest rate cuts.

The US ten-year bond yield rose to 4.46 per cent – its highest level since November – while the equivalent in the UK hit a five-week high of 4.13 per cent.

London-listed stocks are treading water in early trading as investors brace for crucial US and UK economic data for new clues on the global interest rate cut trajectory, while gains in the metals miners limit broader market losses.

Precious metal miners lead sectoral advances, climbing 1.6 per cent, as gold prices hover near record high levels.

Heavyweight industrial metal miners have followed with a 1 per cent rise as metals prices extended their gains on Tuesday amid expectations of a rebound in manufacturing activities globally.

Investors, this week, will keep a close eye on fresh insights into the global interest rate cut outlook, tracking key economic events, including the US inflation, the European Central Bank’s policy meeting and Britain’s GDP figures.

Among individual stocks, BP shares have added 1 per cent as the energy giant expects first-quarter upstream production of both oil and gas as well as low-carbon energy to be higher than the previous three months.

Richard Hunter, head of markets at Interactive Investor:

‘Imperial Brands is deep in the midst of a tobacco industry which is undergoing significant change, with the race to Next Generation Product (NGP) growth central to its plans.

‘The pressure on traditional tobacco products has been in evidence for some considerable time, driven both by changing lifestyle habits as well as increasing regulation. A more recent volley came from the UK Prime Minister with plans to incrementally ban tobacco sales, especially to youngsters, resulting in share price declines across the sector when it was announced.

‘This adds to the burden of regulatory censure which has plagued the sector over recent years, a general decline in traditional tobacco products sales as health issues come to the fore and a reluctance among some investors to invest in tobacco companies at all on ethical grounds.

‘At the same time, the need for a long term replacement for traditional combustible products left the tobacco majors needing to move from a standing start, and even after some years of development the NGP unit is still loss-making for Imperial, although there are clear signs of growth. Whether the growth can be continued at a pace which can even begin to offset the decline in combustibles remains a core question overhanging the sector, let alone whether the current levels of margin and profitably can be replaced.’

Jaguar Land Rover saw full-year sales soar by almost a quarter despite a slump in China.

The car maker, which is owned by India’s Tata Motors, sold 431,733 cars in the year ending March 31 – a 22 per cent annual increase.

Ted Baker plans to shut 15 stores and cut around 245 jobs after crashing into administration.

The company behind the fashion brand’s UK shops, No Ordinary Designer Label Limited (NODL), hired administrators from Teneo last month.

Imperial Brands has upped guidance on profit for the first half of the year on the back of strong tobacco pricing.

The maker of Winston cigarettes and Backwoods cigars expects to meet its full-year expectations of growing net revenue and delivering a step-up in adjusted operating profit growth.

BP expects first-quarter upstream production of both oil and gas as well as low-carbon energy to be higher than the previous three months.

The London-listed oil major also expects strong results in oil and gas trading, along with a $100million to $200 million boost from improved oil refining margins.

The company published its trading update ahead of its results which are due on 7 May.

Last week, rival Shell said in its first-quarter trading update that it expects significantly lower results from liquefied natural gas trading.

Shell has threatened to quit the London stock market in what would be a hammer blow to the City.

Chief executive Wael Sawan said the oil giant was looking at ‘all options’ – including the possibility of moving its share listing to New York.

HSBC faces a $1billion pre-tax loss from a planned divestment from its business in Argentina, as the lender continues to refocus its operations on Asian operations.

The group will sell the business, which covers banking, asset management and insurance and $100million in subordinated debt, to Grupo Financiero Galicia for $550million.

Buenos Aires-based Galicia is Argentina’s fifth largest bank.

The divestment fits with the bank’s Asia pivot strategy as it shifts capital especially to India and China.

The bank’s Hong Kong-listed shares were up 1.1 per cent.

‘This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network,’ said HSBC CEO Noel Quinn.