Frasers buys into Accent Group, Prudential on track with medium-term profit targets

London open

The FTSE 100 is expected to open 17 points higher on Wednesday, having closed up 0.21% on Tuesday at 8,345.46.

Stocks to watch

Frasers Group said it had taken a 14.65% stake in Accent Group, a retail and distribution business in the performance and lifestyle market in Australia and New Zealand. Accent delivered AUD$1.6bn of sales in fiscal 2024 from nearly 900 stores and websites, consisting of multi-brand sports fashion stores, vertical owned brands, and global exclusively distributed brands such as Skechers, Hoka, UGG and Vans, Frasers said on Wednesday. No financial details were disclosed.

Insurance giant Prudential said it is on track to hit its medium-term profit targets after a solid first half, and announced an acceleration in sales momentum since the period-end. New business profit totalled $1.47bn in the six months to 30 June, which was 8% higher than last year when excluding the effect of interest rate and other economic impacts. While this was down from the “exceptional” growth of 47% in the last financial year, the group reiterated its target of achieving a compound annual growth rate for new business profit of 15-20% by 2027.

GSK announced three significant updates on Wednesday, reporting that the Delaware Supreme Court would review a previous decision allowing expert evidence in the Zantac litigation - an important step in the company’s defence against claims that the drug causes cancer. The FTSE 100 pharmaceuticals giant also said that Japan had approved ‘Nucala’, or mepolizumab, for treating adults with chronic rhinosinusitis with nasal polyps, marking the drug's third approved indication in the country. Finally, Bepirovirsen - GSK’s investigational treatment for chronic hepatitis B - had received SENKU designation in Japan, expediting its review based on promising trial results and the need for innovative treatments to achieve a functional cure.

Newspaper round-up

Water companies will struggle to raise the billions of pounds needed to clear Britain’s waterways and fix its creaking infrastructure under the regulator’s plan to keep a lid on rising water bills, the industry will warn. The water sector’s trade association is expected to warn the industry regulator that its proposals to cap the steady rise in household bills by curbing water company spending may drive away the investors needed for a multibillion-pound overhaul of water infrastructure. - Guardian

British ports will be given £10.5m in state support to prepare for increased border checks this autumn, when the EU’s much-delayed entry-exit system (EES) comes into effect. The money will go to the Port of Dover, Eurotunnel’s Folkestone tunnel and St Pancras International in London, where Eurostar trains depart, to supplement investment in facilities to avoid long tailbacks at the borders. – Guardian

Britain’s power and gas suppliers have been ordered to protect their customers from falling into debt as the Government strips millions of pensioners of their winter fuel allowance. Companies will on Wednesday be warned that letting customers run into excessive arrears could put suppliers in breach of their licences to operate. – Telegraph

The co-founder of Hargreaves Lansdown has described the £5.4 billion agreed bid price for the UK’s biggest DIY investment platform as “questionable” and “not the greatest deal in the world”. Stephen Lansdown, who co-founded the business in 1981 with Peter Hargreaves, said the £11.10 per share take-private offer was nevertheless “fair” and would remove the FTSE 100 business from the limelight to enable it to focus on growth. – The Times

Klarna, the buy now, pay later lender, has cut more than 1,000 staff partly due to artificial intelligence and plans to shed almost twice that number ahead of a stock market flotation. The Stockholm-based financial technology group, which wrote off SwKr2.33 billion (£173 million) in bad loans in the first half of 2024 as more shoppers using the popular form of credit defaulted on their borrowings, said: “Our proven scale efficiencies have been enhanced by our investment in AI, which has driven down operating expenses and improved gross profits.” – The Times

US close

US stocks recovered some lost ground in afternoon trade to close marginally higher, with the Dow Jones Industrial Average eking out another record high, though gains were only modest as investors cautiously awaited the latest earnings report from semiconductor giant Nvidia.

The Dow finished just 0.02% higher at a new all-time closing high of 41,250.50, while the S&P 500 and Nasdaq both rose 0.16%. All three indices were trading in the red earlier in the session.

Stocks have been surging in recent weeks – the Dow in particular has jumped 6.4% since 7 August – on the back of rising expectations that the Federal Reserve will ease monetary policy at its next meeting in September.

These projections were cemented on Friday by comments from Fed chair Jerome Powell, who indicated that the "time has come" to cut interest rates.

Investors are now trying to predict how large a rate-cut could be as well as the path for any future easing, with markets already pricing in at least a 25 basis-point reduction in the benchmark lending rate next month.