Portfolio

Weekly review

By Duncan Ferris

Date: Friday 17 May 2019

(Sharecast News) - The FTSE 100 finished the week 145.33 points lower at 7,348.62.
Equity view

Vodafone's shares fell in morning trading on Monday, as speculation mounted that the mobile phone giant was gearing up to cut its dividend, currently one of the highest in the FTSE 100.

Honda has confirmed that it will close its factory in Swindon in 2021, putting around 3,500 jobs at risk.

Metro Bank said its plans to raise £350m of equity capital were well advanced after the bank was forced to reassure customers their money was safe.

Diploma posted a rise in first-half profit on Monday following solid trading across all of its sectors as it sounded an upbeat note on the outlook but cautioned over a slowdown in the industrial seals market.

Comcast said on Tuesday that it has agreed to sell its stake in Hulu to Disney in five years but has given up its voting rights immediately, meaning that Disney now has full control of the streaming service.

UniCredit engaged investment bankers Lazard and JP Morgan to advance a potential bid for German rival Commerzbank.

Taiwan's Foxconn, the world's largest contract manufacturer and a key Apple supplier, has reported a heavier-than-expected slide in quarterly profits.

Nissan warned on Tuesday that operating profit would fall to the lowest level in 11 years for the fiscal year to March 2020 as it takes a hit partly from the arrest of former chairman Carlos Ghosn.

Switzerland's Roche has been forced to extend the its $4.3bn offer for gene specialist Spark Therapeutics as US regulators continue to scrutinise the proposed takeover.

A strong appetite for luxury cars in China and the Americas drove first quarter revenues at posh marque Aston Martin, but higher expansion costs helped it skid to a loss for the period.

Indivior shares got a boost on Wednesday as the drug developer revealed that some of its directors had been buying up the stock.

Supermarket chain Asda could be floated, staff were told on Wednesday, after the competition authorities derailed its proposed tie-up with rival J Sainsbury.

Clydesdale and Yorkshire Bank owner CYBG swung to an interim profit on the back of higher lending, despite the UK's Brexit woes and lower margins on its mortgage book, sending the shares higher on Wednesday.

Nestle is in talks to sell its skincare business to a group led by private equity outfit EQT Partners for $10.1bn (£7.9bn) in what would be the second largest private equity-backed M&A deal on the Continent since the financial crisis, according to data from Refinitiv.

Barclays, Royal Bank of Scotland, Citigroup, JP Morgan and MUFG have been fined a total of €1.07bn by the European Commission on Thursday due to foreign exchange market-rigging that took place from 2007 to 2013.

Thomas Cook shares tanked on Thursday as the company said losses widened in the first half of the year amid "challenging" trading conditions, warned over second-half earnings and confirmed that several bids had been received for all and part of its airline.

Shares in Genus surged on Thursday after the animal genetics company announced a strategic porcine collaboration in China, the world's largest pork market.

Sophos shares rose strongly after the cyber security company posted results ahead of expectations following a string of disappointing updates.

Online retail giant Amazon has waded back into the food delivery market after leading a $575m funding round in Deliveroo, sending rivals such as Just Eat's shares lower in the process.

Troubled British lender Metro Bank confirmed it had raised £375m to prop up its balance sheet, £25m more than planned, sending its shares sharply higher in early Friday trade.

EasyJet said on Friday that it expected tougher trading conditions after the airline's first-half loss more than tripled.

Economic news

The national town centre vacancy rate hit 10. 2% in April, reaching its highest level since 2015, revealed the latest analysis from the British Retail Consortium.

Deputy governor of the Bank of England Ben Broadbent warned on Monday that another Brexit delay might damage the long-term economic outlook as the resulting uncertainty weighed on investor spirits.

The UK's historic levels of employment continued to hold steady in the first quarter, with a record number of people in work.

Britain risks imitating the rise in inequality seen in the United States which could weaken democracy as differences in income, education and health rise, a Nobel Prize-winning economist said on Tuesday.

The UK Gambling Commission issued penalty charges totalling £4.5m to four companies on Wednesday as part of an ongoing investigation into money laundering and consumer safety in online casinos.

UK Prime Minister Theresa May on Thursday agreed to set out a plan for her departure from office after another vote on the Brexit withdrawal deal in June.

Sterling came under renewed selling pressure after the Prime Minister took a major step towards standing down.

The House of Lords weighed in on the controversial HS2 high-speed rail project on Thursday, saying it would not offer value for money to the UK, and was at risk of "short changing" the North of England.

Sterling was under pressure again on Friday, dropping below $1.28 for the first time since February as it emerged that Brexit talks between the government and the Labour party have collapsed, increasing the risk of the UK leaving the EU without a deal.

Economists at Bank of America-Merrill Lynch cut their forecasts for the rate of growth in Britain's economy for this year and next, predicting that the uncertainty around Brexit will last for longer and that the US-China trade war will escalate.

International events

China will raise tariffs on $60bn-worth of US exports in retaliation for the latest decision from Washington to increase levies on $200bn of Chinese goods from 10% to 25%.

Bitcoin has climbed past $7,000, reaching its highest price since September on the back of an extended rally that has seen it surge by more than $1,000 over the weekend.

Saudi Arabia reported attacks on two of its oil tankers off the coast of the United Arab Emirates in a sign of rising tension in the Middle East.

Donald Trump continued his war of words with China on Tuesday, with a series of tweets claiming tariffs had rebuilt America's steel industry and criticising Beijing for walking away from a deal.

US President Donald Trump defended his decision to raise tariffs on China putting, keeping investors on edge and contributing to losses for Asian stocks on Tuesday.

Industrial output growth in the States missed forecasts by a wide margin last month as manufacturing added to a growing list of monthly declines.

China's economy stumbled last month, as retail sales grew at their weakest pace for 16 years and industrial production fell sharply.

Donald Trump declared a national emergency on Wednesday, banning Chinese telecommunications companies such as Huawei and ZTE from selling their equipment in the US as he claims they pose "unacceptable risks".

Eurozone inflation picked up in line with expectations in April, as prices rose in the services sector.

The European Central Bank could face loses over the bonds it holds from Spanish company Distribuidora Internacional de Alimentacion (DIA) as LetterOne battles Santander bank to recapitalise the retailer.

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