Author: Fiona Craig

European and British wholesale natural gas futures rose on Thursday as traders monitored U.S.-Iran negotiations and potential implications for liquefied natural gas shipments through the Strait of Hormuz.

The benchmark Dutch front-month TTF contract increased 1.6% to €74.50 per megawatt-hour, moving higher after recently reaching its lowest level in almost three weeks.

In Britain, the equivalent NBP wholesale gas contract also gained 1.6%, reaching 185.85 pence per therm.

The moves came as U.S. and Iranian officials remained divided over conditions for an agreement, including issues related to the Strait of Hormuz.

U.S.-Iran Negotiations Remain in Focus

U.S. President Donald Trump said at the United Nations that he could “annihilate” Iran if an agreement was not reached, while also referring to negotiations between the two sides.

Iranian President Masoud Pezeshkian subsequently rejected Trump’s threat and said Iran would not surrender, while maintaining that Tehran remained open to diplomacy.

The negotiations have implications for energy markets because the Strait of Hormuz is an important transit route for energy shipments from the Persian Gulf.

Traders are monitoring the potential timing of any reopening of the waterway and the implications for LNG cargoes, including supplies originating in Qatar.

EU Gas Storage Stands at About 70%

European gas inventories also remained in focus ahead of the heating season.

Gas Infrastructure Europe data showed EU underground storage at 70.24% of capacity as of September 23, with approximately 794.84 TWh of gas in storage.

Storage facilities were continuing to receive injections, but inventory levels remained below those recorded at the same stage of the previous year.

The combination of storage levels, LNG supply conditions and geopolitical developments remained among the factors being assessed by European gas traders as the winter heating season approaches.

Euro zone government bond yields moved higher across maturities on Thursday as investors assessed stronger business activity data from Europe and the United States and the implications for monetary policy.

Germany’s 10-year Bund yield, a benchmark for euro zone government debt, rose to 3.549%.

The move followed an increase on Wednesday, when the 10-year yield recorded its largest one-day rise in more than two months.

At the shorter end of the yield curve, Germany’s two-year Schatz yield increased to 3.303%, its highest level since September 2023. The yield had recorded its largest daily increase in almost two weeks during the previous session.

Euro Zone Business Activity Accelerates

Flash Purchasing Managers’ Index data indicated that euro zone business activity expanded at its fastest pace in more than three years.

The figures were stronger than economists had expected and contributed to changes in market expectations for the future path of interest rates.

Separate survey data from the United States also indicated continued activity in the services and manufacturing sectors.

Following the releases, money markets reduced expectations for near-term interest rate cuts.

Markets Reassess ECB Interest Rate Outlook

The economic data also contributed to increased market expectations that the European Central Bank could maintain restrictive monetary policy for longer or consider further increases in interest rates.

Market participants are assessing the potential effect of energy-related input costs on underlying inflation and the implications for future ECB decisions.

These expectations reflect market pricing rather than confirmed future policy decisions by the ECB.

U.S. Treasury Yields Add to European Bond Pressure

European bond-market moves coincided with higher yields in the United States, where investors were also reassessing the outlook for Federal Reserve policy.

According to the supplied futures-market data, markets were pricing an approximately 70% probability of a Federal Reserve rate increase in October.

This represents market-implied pricing and does not establish that the Federal Reserve will raise rates at that meeting.

French Government Bonds Remain in Focus

French government debt also remained under scrutiny as investors monitored the country’s budget discussions and debt-to-GDP projections.

The cost of insuring French sovereign debt through credit default swaps remained near multi-year highs, according to the supplied data.

The yield spread between French 10-year OATs and German Bunds remained elevated, reflecting different market pricing for the two countries’ government debt.

Electric and hybrid vehicles increased their share of the European Union car market during the first eight months of the year, while registrations of petrol and diesel models declined, according to data from the European Automobile Manufacturers’ Association.

New EU car registrations increased 5.3% year to date through August.

Stellantis (BIT:STLAM) shares were down 1.4% at 07:29 GMT following the publication of the data. The figures provided do not establish that the registration report was the sole cause of the share-price movement.

Battery-Electric Market Share Reaches 21.7%

Battery-electric vehicles accounted for 21.7% of the EU car market during the period, compared with 15.8% a year earlier.

A total of 1,641,333 battery-electric vehicles were registered during the first eight months of the year.

Among the markets highlighted in the data, battery-electric registrations increased 74.2% in France, 53.1% in Germany and 40.9% in Denmark.

The three countries together accounted for 64% of battery-electric registrations across the EU.

Hybrids Account for 36.6% of EU Market

Hybrid-electric vehicles represented 36.6% of the EU market, with 2,759,718 registrations during the period.

Registrations increased 21% in Spain and 20.5% in Italy.

Plug-in hybrid vehicles increased their market share to 10% from 8.8% a year earlier, with 758,082 units registered. The data showed increases in plug-in hybrid registrations in markets including Italy, Spain and Germany.

Petrol and Diesel Share Falls to 29%

Petrol registrations declined 18.6%, including a 35.8% decrease in France.

Diesel registrations also fell 18.6%.

Combined, petrol and diesel vehicles accounted for 29% of the EU market, compared with 37.5% a year earlier.

The data also indicated that Chinese automakers increased their presence across markets covering the EU, UK and European Free Trade Association countries.

Fragmentation within the European Union’s banking market is limiting lenders’ ability to achieve the scale needed to finance investment in areas including digitalisation, economic security and defence, according to European Banking Authority chair François-Louis Michaud.

In an interview with Reuters, Michaud said European banks remain highly capitalised and continue to report solid profits, but face constraints arising from differences within the EU’s single market.

He described the European single market as “not as single as it should be.”

Europe Faces Investment Requirements Across Multiple Sectors

“We know that Europe must finance all these transformations: digitalization, the environment, demography, economic security, and defense,” Michaud said. “It’s an existential question for Europe’s future.”

The European Commission is pursuing measures intended to support investment in digitalisation, defence and economic security.

Its competitiveness agenda also includes efforts to facilitate cross-border banking activity and deepen integration within the EU single market.

National Rules Add Costs for Cross-Border Banking

Michaud said mergers between banks are not the only way to address the issue.

From the EBA’s perspective, increased cross-border lending and greater financial integration could also contribute to increasing the scale of banking activity within the EU.

Differences between member states in taxation, insolvency rules and consumer protection requirements can increase the costs and complexity involved when banks offer standardised products across multiple EU markets, Michaud said.

According to the EBA chair, these differences can also limit banks’ ability to achieve economies of scale across the Union.

Christian Dior (EU:CDI) shares rose 16.9% to €427 after the Arnault family group announced a restructuring of the entities through which it controls LVMH (EU:MC), including a planned cash tender offer for minority-held Christian Dior shares.

The shares reached an intraday high of €433, compared with a 52-week low of €363.80.

The restructuring was announced on Wednesday evening and involves a series of proposed transactions affecting Financière Agache, Agache and Christian Dior.

Restructuring Would Create Listed Agache SCA

Under the proposed structure, Financière Agache would first be absorbed into Agache.

Agache would then merge into Christian Dior, which would simultaneously be converted into a société en commandite par actions and renamed Agache.

The transaction would result in the Arnault family’s ownership of LVMH being consolidated within a single listed holding company.

The resulting entity would directly hold 49.76% of LVMH’s share capital and 65.55% of its voting rights.

Indicative Tender Offer Price of Approximately €469

The restructuring would require a cash tender offer for the approximately 2.44% of Christian Dior shares not currently held by the Arnault family group.

An indicative offer price of approximately €469 per Christian Dior share was provided.

The price was calculated at 95% of Christian Dior’s look-through net asset value using LVMH’s one-month volume-weighted average share price.

The final terms of the offer remain subject to the applicable process and regulatory approvals.

Arnault Family Rules Out Squeeze-Out

The Arnault family group said it does not intend to implement a squeeze-out following the tender offer.

As a result, minority shareholders who do not tender their shares would be able to remain shareholders of the newly structured and listed Agache SCA entity.

Shareholders are expected to vote on the proposed restructuring at extraordinary general meetings in December 2026.

The formal tender offer is expected to take place during the first quarter of 2027, subject to clearance from France’s Autorité des marchés financiers.

The transaction therefore remains subject to shareholder votes, regulatory review and completion of the proposed restructuring steps.

Capricorn Energy (LSE:CNE) expects full-year production to exceed the midpoint of its guidance range of 18,000 to 22,000 barrels of oil equivalent per day, supported by output from its operations in Egypt.

The company reported average working interest production of 19,337 barrels of oil equivalent per day during the first half.

Capricorn said production levels continued through July and August, with new wells contributing to output.

First-Half Operating Profit Reaches $56.3 Million

Capricorn reported an operating profit of $56.3 million for the first half, compared with an operating loss of $2 million in the corresponding period a year earlier.

Revenue from the company’s Egyptian operations totalled $100 million for the six months ended 30 June.

Capricorn achieved an average realised oil price of $89.5 per barrel during the period, up from $73.6 per barrel a year earlier.

DNO and Genel Offers Remain Active

Capricorn remains the subject of competing takeover proposals from DNO (OSE:DNO) and Genel Energy (LON:GENL).

Earlier in September, Capricorn accepted a $396 million offer from DNO after the Norwegian oil company submitted a higher proposal than the competing offer from Genel Energy.

According to Capricorn, both takeover offers remain active.

The competing proposals remain subject to their respective terms and applicable takeover processes.

CVS Group (LSE:CVSG) reported a 5.9% increase in full-year revenue to £712.8 million for the year ended 30 June 2026, supported by growth in Australia and an improvement in like-for-like sales.

Like-for-like sales increased 2.1%, compared with growth of 0.2% in the previous financial year.

The veterinary group said consumer confidence and extreme heat during May and June affected customer footfall in the fourth quarter.

Adjusted EBITDA Increases 5.1%

Adjusted EBITDA rose 5.1% to £141.5 million, while the adjusted EBITDA margin remained unchanged at 19.9%.

The company recorded the increase despite higher employer National Insurance contributions and wage inflation.

Adjusted earnings per share increased 6.9% to 85.6 pence.

Statutory profit before tax, however, declined to £32 million from £32.6 million. CVS attributed this to factors including higher depreciation following investment, costs associated with the Competition and Markets Authority investigation and expenses related to the group’s move from AIM to the London Stock Exchange’s Main Market in January.

CVS Resumes UK Acquisition Activity

The Competition and Markets Authority published its final remedies order on 22 September, enabling CVS to resume acquisition activity in the UK.

CVS said it has exchanged contracts to acquire a two-site veterinary practice for an initial consideration of £15 million and has identified further potential acquisition opportunities.

In Australia, revenue increased to £79.1 million from £52.1 million.

The number of Australian practices increased to 57 from 43, with the country accounting for approximately 11% of group revenue.

Net Bank Borrowings Rise to £199.6 Million

Net bank borrowings increased to £199.6 million from £131.4 million, while leverage rose to 1.63 times from 1.18 times.

The increase followed expenditure on acquisitions, capital investment and share buybacks.

CVS completed a £20 million share buyback in January 2026 and launched a further £50 million programme in May, which remained in progress at the reporting date.

Final Dividend Increased to 9 Pence

The board recommended a final dividend of 9 pence per share, compared with 8.5 pence for the previous year.

Subject to the applicable approval process, the dividend is due to be paid on 4 December.

CVS is also progressing its search for a successor to chief executive Richard Fairman, who announced in March that he planned to retire. The company said the search process was well underway.