Level 2

Weekly review

By Josh White

Date: Friday 25 May 2018

(Sharecast News) - The FTSE 100 finished the week 48.49 points lower at 7,730.28.
Equity view

Pennon posted a rise in full-year pre-tax profit on Friday and hiked its dividend as it sounded a positive note on the outlook for water and waste.

Spectris posted a jump in group like-for-like sales for the first quarter on Friday and said its performance remains consistent with its expectations for the full year, as it announced that chief executive John O'Higgins plans to retire in the course of the next twelve months.

SSE's profits fell but the energy supplier lifted its full year dividend 3.7% to 94.7p as it prepared for a significant year of transformation in 2018 and set out plans for cash payouts in the years beyond.

European focused oil and gas producer Frontera Resources has completed logging the characteristics of an open hole well at a sidetracked portion of its T-39 well in the Taribani field of Georgia.

B&Q and Screwfix owner Kingfisher was hammered by bad weather in February and March, with like-for-like sales down 4% but management still confident about the underlying turnaround of the business.

TalkTalk announced the sale of its direct business-to-business operation for £175m as falling revenue and rising costs drove the broadband operator to a loss last year.

Intertek Group said it was on track to deliver on its 2018 targets in a trading update on Thursday, reporting group revenue of £861.2m for the four months to 30 April - an increase of 4.4% at constant rates, but down 2.5% at actual rates.

Electrocomponents reported revenue growth of 12.8% in its final results to 31 March on Thursday, to £1,71bn, with all five of its regions reportedly seeing double-digit like-for-like growth.

BBA Aviation has agreed to buy fuel and fuel-related services supplier EPIC Fuels for a cash consideration of $88.1m.

Severn Trent increased its dividend 6% after the water and sewage group received more incentive payments than expected and said £100m of efficiency savings would be reinvested back into the business.

Drinks maker Britvic posted a jump in interim revenue and earnings but a drop in pre-tax profit on Wednesday as it expressed confidence over the rest of the year.

Wealth management group St. James's Place announced on Wednesday that, as part of its planned succession arrangements, Sarah Bates had decided to retire as chair and as a director of the company.

Rank Group has bought QSB, the owner of Spanish digital bingo business YoBingo.es, for up to €52m in cash.

HomeServe's annual profit rose 25% as strong growth at its North America division more than made up for falling profit at the UK arm of the emergency home repairs group.

Balfour Beatty updated the market on is performance on Tuesday ahead of its annual general meeting later in the week, reporting that trading was in line with its full-year expectations.

The electricity regulator is investigating whether National Grid broke rules over its demand forecasting for the UK electricity market.

FTSE 250 gambling software group Playtech said on Monday that its acquisition of 71% of Italian gaming company Snaitech has been approved by the Italian gaming regulator.

AstraZeneca received US regulatory approval for its Lokelma treatment for high potassium levels in the blood and, separately, submitted a new drug application in Japan for a diabetes treatment.

NewRiver was forced to confirm that it has entered a period of exclusivity with Hawthorn Leisure Holdings and its major shareholder regarding a potential acquisition of the business on Monday.

Budget airline Ryanair posted a 10% jump in full-year pre-tax profit on Monday but struck a cautious note on its FY19 outlook on the back of rising costs and flat fare growth as it cut its full-year guidance.

Economic news

UK gross domestic product increased by only 0.1% in the first quarter of 2018, the Office for National Statistics confirmed on Friday, unrevised from its preliminary estimate.

The value and number of UK mortgages improved more than expected in April, confirming a stabilising of housing demand, while credit card data also showed strongly in value in April with numbers of mortgage approvals driven by 30% growth in remortgaging.

Theresa May is set to ask the European Union for an extension of the Brexit transition period until 2023, according to reports.

Pay rises from major British employers averaged at 2.5% last month, a more generous rate than the same month in 2017, according to industry data released on Thursday.

Inflation fell unexpectedly in April, casting doubt on when the Bank of England will next decide to increase interest rates.

Retail sales picked up in May after two months of declines but remained weak, a CBI survey showed.

Toyota has warned its UK factories will struggle to gain investment if the government announces a future ban on the sale of its hybrid cars.

Factory order books weakened in May and output growth slowed to its weakest for more than two years in signs that UK manufacturing may have peaked as the world economy slows.

Theresa May has received mixed support for her compromise Brexit custom plans, with some Tory MPs preparing for a general election later this year but foreign minister Boris Johnson backing the Prime Minister.

Property asking prices climbed to a new record high this month, but prices fell across south-east England for the first time since in seven years.

Despite their waning popularity, the average price of a flat in the UK has risen by a total of £75,074 over the last five years, according to new research from Halifax.

CBI president Paul Drechsler will use his last major speech in the role to call for an end to Brexit uncertainty to allow for businesses and the government to mend poor productivity and regional inequality.

International events

Business confidence in Germany was steady in May, with the downward trend in morale over after five months of declines, according to a survey released by the Ifo Institute on Friday.

Orders of US goods made to last more than three years fell by slightly more than expected last month, as orders for civilian aircraft slowed down a bit.

The number of Americans filing for unemployment benefits rose last week to a seven-week high, according to data from the Labor Department.

The US commerce department announced a new investigation into the automobile sector imports that could result in new US tariffs on European and Asian products.

The pace of growth in America's economy accelerated in May, according to the results of two widely-followed surveys, amid signs of heightened price pressures in the pipeline.

European economic growth is slowing further, manufacturing and services industry surveys indicated on Wednesday.

Italian stocks were on the front foot on Tuesday as the anti-establishment Five Star Movement and the anti-migrant League parties looked for their 'unknown' prime ministerial candidate to be formally approved by president Sergio Mattarella.

The General Prosecutor's Office of Schleswig-Holstein has requested the extradition of former Catalan President Carles Puigdemont to Spain to stand trial before the Regional Superior Court for the crimes of rebellion and disturbing the public order.

A widely-followed survey of economic activity in the States ticked higher last month, as indicators linked to production offset weakness in those for personal consumption and housing.

The EU must work harder to preserve its oil trade with Iran following the United States' withdrawal from 2015 international nuclear pact, Iran's foreign minister told the EU's energy chief on Sunday.

The US administration set aside its threat of tariffs on Chinese goods for the moment, following two days of negotiations with Beijing, after China proposed a "significant increase" in its purchases of US-made goods.

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