Weekly review

The FTSE 100 ended the week 301.27 points lower, closing at 7,016.25 on Friday.

Equity view

Media firm Future said on Friday that it has made an "encouraging start" to the second half, supported by a return to audience growth as Covid-19 comparators were fully lapped. Future stated it continued to benefit from the effect of its diversified audiences and revenue streams, its operating leverage, "excellent" cash conversion, and strong balance sheet.

Natural resources company Glencore said on Friday that its annual portfolio mix adjustment guidance was expected to increase dramatically as a result of "unprecedented dislocation" in energy markets, putting it on track for a record full-year performance. Glencore stated that its February full-year commodities trading guidance of $32.8 per tonne was expected to increase to a range of roughly $82-86 per tonne for the first half of 2022 as the commodity trading industry enjoys its most profitable period in history amid Russia's invasion of Ukraine.

Gambling software maker Playtech said on Friday that the UK Takeover Panel has extended the deadline for TTB Partners to either announce a firm intention to make an offer for the company or walk away. TTB initially had until the end of the day on Friday but as discussions between the two parties are still ongoing and "progress continues to be made", the Takeover Panel has agreed to extend the deadline to 15 July.

Funeral services group Dignity said on Friday that it was "delighted" by its inclusion in the Financial Conduct Authority's list of authorised funeral plan providers ahead of tighter regulatory scrutiny on the sector set to come into effect in late July. Dignity was included on a list of firms the FCA said it was "likely" to authorise from 29 July. Following that date, funeral care providers will be required to be regulated by the FCA in order to continue selling or carrying out funeral plans.

Publishing company Informa said on Thursday that year-to-date trading has been "robust" across both its academic and B2B businesses, boosting underlying revenues by more than 40% year-on-year. Informa said its performance so far in 2022, combined with strong forward visibility on subscriptions revenues in its Taylor & Francis unit, as well as exhibitor and delegate bookings in live and on-demand events and favourable currency trends, had put the group on track to meet the upper-end of its full-year guidance range of £2.15bn-£2.250bn and adjusted operating profits of £470.0m-£490.0m.

Big Yellow said it had bought a 53,000 sq ft self-storage centre in Aberdeen for £10m. Currently branded as Simply Self Storage, the building is the only purpose-built self-storage centre in the city, and will be rebranded as Big Yellow, the company said on Thursday.

Healthcare investment company Syncona reported flat year-end net assets of £1.31bn in its final results on Thursday. The FTSE 250 firm said that it made for net assets per share of 194.4p as at March 31, rising from 193.9p, making for a net asset value total return of 0.3%, down from 4.4% last year.

Halfords shares were well into negative territory on Thursday after it warned of a 23% fall in profits this year amid surging inflation and economic uncertainty, despite reporting strong full-year growth. The London-listed automotive and cycling retailer said revenue was up 6% year-on-year to £1.37bn, while underlying profit before tax was £89.8m - up 57.8% over the 2020 financial year, but down 9.7% year-on-year.

Mining giant Rio Tinto has delivered its first ore at its Gudai-Darri greenfield mine in Western Australia's Pilbara region. Rio Tinto said on Wednesday that its first convoy of autonomous AutoHaul trains were loaded with ore from Gudai-Darri's process plant before travelling on a new 166-kilometre rail line that connects to the group's existing rail and port infrastructure.

Trading at Whitbread beat expectations in the first quarter, the pubs and hotel operator said on Wednesday, as demand continued to rebound following the worst of the pandemic. The owner of Premier Inn, Brewers Fayre and Beefeater, among others, saw UK accommodation sales surge 221.6% on a like-for-like basis year-on-year, or by 21.3% when compared to the same period in 2019.

Chilean copper miner Antofagasta said on Wednesday that full-year production was set to be at the bottom end of guidance following a leak in the concentrate pipeline at the Los Pelambres mine, and subsequent shutdown. Since its announcement of the leak on 7 June, restrictions to access have now been partially eased and repairs have begun. However some access restrictions remain that will prolong the time required to complete the scheduled work.

Japan’s SoftBank is reportedly planning to list some of its stake in chip designer Arm on the London Stock Exchange, having previously planned to only use the US market. Bloomberg cited people familiar with the matter as saying that Softbank is adjusting plans for an initial public offering of its chip technology division and will likely still list the majority of what it offers for trading on US exchanges. The size and timing of the sale hasn’t been finalised and plans for the listing still may change.

Equipment rental company Ashtead said on Tuesday that it had delivered a record full-year, with both revenue and profits up following a solid fourth-quarter showing. Ashtead said full-year revenues were up 19% at $7.96bn, with annual rental revenues 24% stronger at $7.23bn. Underlying earnings were 18% higher over the twelve months ended 30 April at $3.60bn, while operating profits were up 30% at $1.94bn, and adjusted pre-tax profits rose 38% to $1.82bn.

Rail and bus operator FirstGroup, which last week rejected a £1.23bn takeover approach, reported higher adjusted operating profits and reinstated its dividend as travel recovered from the Covid pandemic. The company posted profits of £226m compared with £220m a year ago for the year to March 26. Revenues fell to £5.5bn from £6.8bn, reflecting the sale of First Student, First Transit and Greyhound bus services.

Distribution and services group Bunzl has entered into an agreement to acquire German cleaning and hygiene business Hygi.de for an undisclosed sum. Bunzl said on Tuesday that the acquisition of Hygi.de, an online distributor of cleaning and hygiene products, represented "an important milestone" for the group, materially increasing its presence in the large German market.

Bookmaker Entain has agreed to acquire Dutch online sports betting and gaming operator BetEnt, which trades under the BetCity.nl name, from Sports Entertainment Media as part of a deal valued at as much as €850.0m. Entain said on Tuesday that it will make an initial consideration of €300.0m for BetEnt, funded from existing cash resources, with a balancing payment to be paid in early 2023 based on the actual performance of BetCity in the financial year 2022.

Real estate investment trust Tritax Big Box has leased one million square feet across four buildings at its Symmetry Park Rugby development site to an unnamed storage and information management services group. Tritax Big Box stated the logistics facilities, two were from its speculative development programme, will be let on a new 15-year lease, with five-yearly open market rent reviews, and were collectively expected to deliver a yield on cost within its 6-8% guidance range.

Venture capital firm Molten Ventures said on Monday that it had made "huge progress" from both an operational and financial perspective in the year ended 31 March, with the group's gross portfolio value rising significantly during the period. Molten Ventures said its gross portfolio value had risen from £984.0m at the end of the previous trading year to £1.53bn twelve months later, while its net asset value per share shot up from 743.0p in 2021 to 937.0p in 2022.

Industrial business park owner Sirius Real Estate reported a 73.1% rise in annual rents to €167m driven by higher demand and acquisitions as it lifted its dividend by 16%. The company, which operates out of the UK and Germany, said pre-tax profit for the year to March 31 was up 3.2% to €169m. The company is paying out a total per-share dividend of 4.4 cents.

Iron ore pellets exporter Ferrexpo lowered its short-term production schedule for the summer months on Monday as it issued an update on its logistics export network and operations in Ukraine. Ferrexpo stated that Ukraine's Black Sea Ports remained closed and that it had been forced to divert all of its iron ore pellet sales to European markets via the country's "diverse railway network", as well as via its barging operations. However, it also acknowledged that Russia's invasion of Ukraine had resulted in "periodic disruption" to the railway network across the country, with the national rail operator having to consistently repair and re-open damaged sections of the network following air strikes.

Economic news

The Competition and Markets Authority said on Friday that it has appointed Sarah Cardell as interim chief executive. Cardell is currently the General Counsel of the CMA and will take over on an interim basis from current CEO Andrea Coscelli when he leaves at the end of his term in July.

The Bank of England hiked interest rates by 25 basis points on Thursday to 1.25% - the highest level in 13 years - amid surging inflation. Six members of the Monetary Policy Committee voted for a 25 basis points hike, while three voted for 50 bps. Jonathan Haskel, Catherine Mann and Michael Saunders were the hawks. In the last few days, expectations of a 50 bps hike had grown.

Centrica announced a major agreement with Norwegian state energy giant Equinor on Thursday, to deliver an additional one billion cubic metres of gas supplies to the UK for each of the next three winters. The British Gas owner said amid a “difficult” geopolitical and macroeconomic environment, the deal would provide further energy security for the UK.

The UK’s financial regulator on Thursday warned UK lenders to make a greater effort to help borrowers struggling amid the cost-of-living crisis, including offering payment holidays and waiving interest for those most at-risk. In a letter to more than 3,500 lenders across the industry, the Financial Conduct Authority (FCA) demanded firms respond “flexibly” and support customers beyond just scheduling collections for missed payments.

British food prices are set to surge 15% this summer and will remain high for at least a year, in a further blow to hard-pressed consumers already struggling with the cost-of-living crisis, according to a report released on Thursday. The Institute of Grocery Distribution said meat, cereals, dairy, fruit and vegetables are likely to be the worst affected as Russia’s war in Ukraine drives up the price of key foodstuffs.

Don’t travel by train unless you absolutely need to, was the advice given on Wednesday ahead of record-large railway strikes next week, with around half of all routes set to be shuttered on three separate days. The state-owned infrastructure operator Network Rail added that passengers should not expect anything resembling a normal level of service on the routes set to remain open.

The UK government has been severely criticised for axing a £1,500 grant for motorists towards the cost of buying an electric car. The Department for Transport claimed the money would now go towards improving electric vehicle charging, much to the annoyance of industry groups who said the decision would put the brakes on electric car sales.

The UK unemployment rate unexpectedly rose in the three months to April for the first time in a year, while vacancies remained at record levels and wages fell at the fastest rate in a decade. According to data released on Tuesday by the Office for National Statistics, the unemployment rate ticked up to 3.8% from 3.7% in the three months to March and versus expectations for a decline to 3.6%. Still, it remained close to 50-year lows.

The Competition & Markets Authority has agreed to investigate the road fuel market, after petrol and diesel prices hit fresh highs. Prices at the pump have soared this year, pushed higher by a range of factors including surging inflation and the war in Ukraine.

The UK economy unexpectedly contracted in April, at the sharpest pace in more than a year, amid higher prices and supply chain issues. According to data released on Monday by the Office for National Statistics, the economy shrank by 0.3% in April following a 0.1% decline in March, and versus consensus expectations of 0.1% growth. For the first time since January 2021, contractions were seen in services, production and construction.

International events

The Bank of Japan bucked the trend on Friday by keeping interest rates on hold and maintaining a dovish stance. As expected, the BOJ voted 8-1 to keep its short-term interest rate target at -0.1% and maintain its pledge to guide the 10-year government bond yield around 0%. The Bank also said it would offer to buy unlimited amounts of 10-year government bonds (JGB) at 0.25% every business day, reiterating guidance given in April.

The Swiss National Bank unexpectedly lifted interest rates on Thursday for the first time in 15 years. The Bank lifted its policy rate from -0.75% to -0.25%, where it has been since 2015. It marked the first hike by the SNB since September 2007.

The Federal Reserve hiked interest rates by more than expected on Wednesday and left the door open to another such move in July. The target range for the Fed funds rate was raised by 75 basis points to 1.5-1.75%, against expectations for a 50bp increase.

US retail sales fell unexpectedly last month on the back of a steep decline in auto sales and a drop in furniture sales. According to the US Department of Commerce, in seasonally adjusted terms, US retail sales volumes slipped at a month-on-month pace of 0.3% to reach $672,874bn.

Global demand for oil is forecast to reach fresh highs next year, according to the rich world's oil watchdog , although supply could struggle to keep up. The International Energy Agency, publishing its monthly oil report, said demand was likely to rise by 2.2m barrels per day, or 2.2%, to 101.6m bpd in 2023 compared to 2022, exceeding pre-pandemic levels.

The Eurozone’s trade deficit widened in April, official data showed on Wednesday, as industrial output came in below expectations. According to first estimates from Eurostat, the European Union’s statistics office, the Eurozone exported €223.9bn of goods to the rest of the world, an increase of 12.6% year-on-year. Imports surged 39.4%, to €256.5bn, driven by a further hike in energy imports.

The European Central Bank is to hold a rare unscheduled meeting on Wednesday to discuss the turmoil on Europe’s bond markets. In a statement, the bank said: "The Governing Council will have an ad hoc meeting on Wednesday to discuss current market conditions." The meeting is expected to start at 1000 BST, with invitations reportedly sent out on Tuesday.

Retail sales in China continued to fall last month, data showed on Wednesday, as the effects of Beijing’s strict zero-Covid policy weighed on consumption. According to the National Bureau of Statistics, retail sales fell 6.7% year-on-year. Month-on-month, sales were broadly flat.

Opec left its forecasts for world oil demand unchanged on Tuesday, but warned that the global economy was "fraught" with uncertainty. The cartel, publishing its latest monthly report, forecast world oil demand growth for 2022 would be 3.4m barrels per day (bpd), with demand projected to average 100.29m bpd, unchanged on May’s estimates. Demand is expected to exceed pre-pandemic levels by 0.09m bpd.

Growth in the US producer price index increased as expected in May, according to figures released on Tuesday by the Bureau of Labor Statistics. The producer price index for final demand rose 0.8%, in line with analysts' expectations, up from 0.4% in April but down 1.6% in March. On the year, PPI rose 10.8% in May, versus 11% the month before.