Level 2

Weekly review

By Josh White

Date: Friday 23 Apr 2021

(Sharecast News) - The FTSE 100 ended the week down 80.97 points, closing on Friday at 6,938.56.
Equity view

LondonMetric Property has sold two properties let to Marks & Spencer and Wickes in Derby for a combined £11.1m to unnamed buyers. The sale represents a blended net initial yield of 6% and a 7% surplus to the last reported book value.

GlaxoSmithKline announced on Friday that the US Food and Drug Administration (FDA) has approved 'Jemperli', or dostarlimab-gxly, based on its Biologics License Application. The FTSE 100 drugmaker said dostarlimab, a programmed death receptor-1 (PD-1) blocking antibody, is indicated for the treatment of adult patients with mismatch repair-deficient (dMMR) recurrent or advanced endometrial cancer, as determined by an FDA-approved test, that had progressed on or following prior treatment with a platinum-containing regimen.

Fulham Shore, owner of the Franco Manca pizza chain, said it was on the lookout for new branches after trading in the first week following lockdown beat two years earlier. The company has reopened 70 of its 72 restaurants for combinations of outdoor dining, delivery and collection after the government relaxed restrictions on 12 April. It said 37 out of 52 operational Franco Manca pizzeria had outside dining space and 16 The Real Greek branches out of 18.

Pantheon International reported an unaudited net asset value per share of 3,274.4p as at 31 March on Friday, making for an increase of 119.5p, 3.8%, from the end of February. The FTSE 250 private equity company said that over the month, valuation gains added 101.8p or 3.2%, investment income added 2.9p or 0.1%, foreign exchange movements were 18.9p or 0.6%, and expenses and taxes were -4.1p or -0.1%.

House builder Taylor Wimpey maintained annual guidance and reported an increased order book despite the latest Covid lockdown as strong demand and government support schemes drove sales. The company on Thursday said its sales rate for the year to April 18 was 1.00 against 0.90 in the equivalent period last year. Its order book stood at around £2.8bn, representing 10,995 homes against £2.66bn a year ago.

Informa plunged to a £1.1bn annual loss as revenue slumped and the events and information group wrote down £593m of assets because of Covid-19. The company swung to a pretax loss of £1.14bn in the year to the end of December from a £319m profit a year earlier as revenue fell 42.5% to £1.66bn. Adjusted operating profit fell to £267.8m, in line with guidance, from £933.1m.

Anglo American reported higher first quarter copper production despite capacity constraints caused by Covid-19 restrictions as it continued to shift its focus towards "future enabling" metals and minerals. The mining giant on Thursday said copper production for the three months to March 31 increased by 9% to 160,300 tonnes, due to strong operational performance at its Los Bronces and Collahuasi operations in Chile.

Segro said it made a good start to 2021 and that it had signed £18m of new rents in the first quarter. The warehouse operator said the first quarter's headline rent signings compared with £14.3m a year earlier. The vacancy rate edged up to 4.4% from 3.9% at the end of December, mainly because Segro took back space for refurbishment.

BHP said it was ready to finish the year strongly as the miner reported record production at its Western Australia iron ore business in the first nine months. The company left annual production guidance for iron ore and petroleum unchanged but reduced guidance for metallurgical coal and energy coal, due mainly to wet weather.

Contracts-for-difference trading platform Plus500 has made its first foray into the US market after buying Cunningham Commodities and Cunningham Trading Systems for $30m. The deal, which "brings with it a scarce and valuable license" to operate US markets, will be funded from Plus500's existing cash balances, the company said on Wednesday, adding that some of the cash would be held in escrow for two years from completion for retention purposes.

Power generation company Drax reported a robust first quarter as it worked towards its decarbonisation targets. The company on Wednesday said it continued to net debt to adjusted core earnings to return to its long-term target of around two times by the end of 2022.

Hikma Pharmaceuticals has resumed the launch of its generic version of GlaxoSmithKline's 'Advair Diskus' in the United States, it announced on Wednesday, following Food and Drug Administration (FDA) approval of an amendment it submitted to its Abbreviated New Drug Application in January. The FTSE 100 pharmaceuticals maker said the amendment reflected enhanced packaging controls to meet new industry standards adopted since its initial submission.

Rio Tinto reported a 7% improvement in Pilbara iron ore shipments year-on-year in the first quarter on Tuesday, to 77.8 million tonnes on a 100% basis. The FTSE 100 mining giant said production was 2% lower year-on-year at 76.4 million tonnes, however, which was driven by above-average wet weather in the mines through February, and fixed plant reliability.

Avast reported a 10.4% organic rise in revenue year-on-year in its first quarter on Tuesday, to $237.1m (£169.35m), with growth coming in at 10.5% at actual rates. The FTSE 100 cybersecurity software company said its consumer direct business continued to deliver good growth, while the SMB business also sustained its positive momentum.

Shopping centre owner Hammerson on Tuesday appointed a new finance director and reported an encouraging rebound in footfall at its English malls after a partial easing of Covid-19 curbs this month. The company said Himanshu Raja, who was previously finance head at real estate agent Countrywide, would replace James Lenton as chief financial officer.

First quarter revenue at price comparison platform Moneysupermarket fell by a fifth as consumers reined in their spending during the latest Covid lockdown. Revenue for the three months to March 31 fell to £85.5m, down from £107.3m a year ago. Nevertheless, the online service-switching service said it expected its full-year results to be in line with market expectations.

ThreeArc Mining's initial Ore Reserve estimate for the Tomtor niobium and rare-earth metals project in the northwestern Russian province of Yakutia has confirmed it as one of the top-three rare-earths projects in the world. FTSE 100 listed Polymetal owns a 9.1% stake in ThreeArc.

Gas producer Energean lifted annual core earnings and continued to work towards first gas from its Karish field in the first quarter of 2022 along with an inaugural dividend payment in the same year. The company on Monday reported a rise in earnings before interest, tax, depreciation and amortisation to $107.7m from $35.6m a year ago as sales rose to £3356m from $75.7m.

C&C said its Matthew Clark Bibendum (MCB) wholesale business was forced to shut down its computer systems after it was the target of a cyber attack. The drinks company said MCB discovered the attack on 16 April and quickly closed all its IT systems. MCB has hired a forensic IT firm and lawyers to investigate the incident and restore the systems as quickly and safely as possible.

Johnson Matthey announced two developments in the commercialisation of its 'eLNO' portfolio of nickel-rich advanced cathode materials on Monday, with the first being a partnership with Finnish Minerals Group. The FTSE 100 specialty chemicals company said the partnership would support the development of its previously-announced second commercial plant, which would be in Finland.

Economic news

UK retail sales soared in March ahead of a partial lifting of coronavirus lockdown restrictions, according to official data released on Friday. Sales volumes jumped 5.4% in March compared with February, the Office for National Statistics said, with clothing stores showing a rise of 17.5% even though non-essential stores remained closed until April 12.

Manufacturing and services activity in Britain accelerated further at the start of the second quarter, with the former expanding quickest as lockdowns were eased, two closely-followed surveys showed. IHS Markit's composite output gauge, which tracks production in both sectors combined, jumped from 56.4 at the end of March to 60.0 in the beginning of April (consensus: 59.0).

UK manufacturing optimism improved at its fastest pace for almost 50 years and investment intentions rebounded as economies began to reopen from Covid-19 lockdowns, a CBI survey showed. Business sentiment in the three months to April jumped to +38% from -22% in January, the business group's survey of 288 manufacturers found. The improvement was the greatest since April 1973 when Edward Heath was prime minister and Slade ruled the pop charts.

UK consumer sentiment took a cautious turn in April as concerns about new strains of Covid-19 and the economy tempered the enthusiasm recorded earlier in 2021. GfK's consumer confidence index rose 1 point to -15 after a 7-point jump in March as people's view of their personal finances held steady but households were less likely to make a big purchase.

UK inflation rose to 0.7% in March as the cost of fuel and clothing rose, setting the scene for sharper increases later in 2021. Consumer price inflation increased from an annual rate of 0.4% the previous month and was slightly below the 0.8% average forecast in a Reuters poll.

UK house prices have risen at the fastest pace in more than six years, official data showed on Wednesday, fuelled by the stamp duty holiday and demand for larger homes. According to the Office for National Statistics, average house prices in the UK increased 8.6% in the year to February, up from January's 8.0% rise and the highest increase since October 2014. It was also above consensus, for around 8.0%.

Britain's labour market failed to improve as much as anticipated in March, confounding economists' expectations and the results from recent surveys. Economists remained sanguine nevertheless.

UK building society Nationwide is increasing the amount it will lend to first-time buyers in a move it claims will help increase home ownership. The company on Tuesday said buyers with deposits as low as 10% will be able to borrow five and a half times their earnings on a longer-term mortgage.

Visits to UK shops jumped by 88% in the first week after non-essential stores were allowed to reopen, a survey showed. The biggest increase was at shopping centres where footfall rose 127% from a week earlier followed by high streets where visits were up 93%, Springboard said. Footfall at retail parks, which have been busier than other categories during lockdowns, rose 35%.

British scientists on Monday launched a trial to test the immune system response of people who had passed Covid-19 when they were exposed to the virus again. "The information from this work will allow us to design better vaccines and treatments, and also to understand if people are protected after having COVID, and for how long," said Helen McShane, a University of Oxford vaccinologist and chief investigator on the study, according to Reuters.

International events

Euro area manufacturing and services activity surprised to the upside in April, growing at a pace not seen since July, the results of two key surveys revealed. Based on preliminary results, IHS Markit's composite output index for both sectors rose from a reading of 53.2 for March to 54.7 in April (consensus: 53.3).

The World Tourism Organization (UNWTO) and the International Air Transport Association (IATA) announced the launch of a Destination Tracker on Friday. The feature, which is aimed at restoring normality to international travel and confidence in tourism, is the result of both organisations' joint efforts and will help governments provide information on Covid-19 requirements for travel and on the measures in place upon arrival at the destination.

The European Commission is working on legal proceedings against AstraZeneca after the drugmaker failed to deliver the Covid-19 vaccines that it had been contracted for with the European Union. According to sources familiar with the matter who spoke to Reuters, a report published by Politico on Thursday was correct.

European Central Bank policymakers stood pat on policy, reiterating their intention to up the ante on bond purchases and, apparently, while leaving all their options open. While Thursday's decisions were expected, ECB watchers believed that there was a bit of a rift in the Governing Council between those who wanted to clearly signal that the Pandemic Emergency Purchase Programme (PEPP) would not be extended beyond March 2022 and those preferring an open-ended commitment.

Inflation was set to be a "little higher" in 2021 but the US central bank was not aiming for a large and sustained rise beyond its target, its chairman Jerome Powell said. In a letter dated 12 April, Powell said: "We do not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period."

Germany's top court allowed the country to proceed with the ratification of the European Union's €800bn pandemic recovery fund. According to Bloomberg, the Federal Constitutional Court said on Wednesday that plaintiffs opposing the plan failed to show they were "likely to win" their challenge.

China's president Xi Jinping has called for a shake up of global governance, including challenging the existing hegemony of big countries. In a speech to the annual Boao Forum for Asia, Xi said some countries wanted to "build barriers and decouple works against economic and market principles", actions with few benefits that would only hurt other nations.

European Union negotiators on Tuesday will attempt to close a deal on a legal framework to make the bloc's emission targets legally binding, ahead of a summit of global powers this week. The EU is seeking to set out clear goals in its fight against climate change and is racing to finish the proposal ahead of a summit that is to be hosted by the US on Thursday and Friday, reported Reuters.

China's CanSino Biologics will start clinical trials for a new Covid-19 vaccine that is inhaled rather than injected, the company's co-founder and Chief Executive Xuefeng Yu said on Sunday. CanSinoBIO is jointly developing the inhalation vaccine with the Beijing Institute of Biotechnology.

Construction output fell sharply across the Eurozone in February, official data published on Monday showed. According to Eurostat, the European Union's statistics office, seasonally-adjusted production in the construction sector decreased at a month-on-month pace of 2.1% in the Eurozone, or by 1.6% across the wider bloc. That compares to a 0.8% fall in the Eurozone in January, and a 1.0% decline across the EU.


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