Weekly review

The FTSE 100 ended the week down 37.38 points, or 0.49%, closing at 7,562.36 on Friday.

Equity view

CMC Markets said on Friday that it has bought a 33% stake in StrikeX Technologies, a customer centric blockchain solutions business. "This is a significant milestone for both companies and the digital asset industry, combining StrikeX's expertise in tokenisation and self-custody technologies with CMC Markets' extensive experience in financial services," it said.

Payments provider Network International said on Friday that it has agreed to be taken over by Canada’s Brookfield Asset Management in a £2.2bn deal. Under the terms of the transaction, Network shareholders will be entitled to receive 400p in cash for each of their shares. This represents a premium of around 64% to the closing share price on 12 April, which was the last business day prior to the start of the offer period.

Mothercare said on Friday that chief executive officer Daniel Le Vesconte has stepped down with immediate effect, and that its performance remains on track. The retailer said that chairman Clive Whiley and chief financial officer Andrew Cook will revert to leading the operating board, as was the case for the previous three years, until the process to find a replacement CEO is completed.

Amigo Holdings has granted a shareholder an exclusivity agreement to pursue financing options for the troubled business, the mid-cost lender confirmed on Friday. Amigo said that under the agreement, financier Michael Fleming would explore finding and completing a debt investment in the firm or its subsidiaries.

Budget airline Wizz Air said it expected to post a net profit this year after posting a net annual loss due to higher fuel prices and the war in Ukraine. The company on Thursday reported an operating loss of €535m, narrower than the €642m a year earlier.

UK government contractor Capita said it has agreed to sell its five software businesses for an enterprise value of £33m, as the outsourcer tries to strengthen its balance sheet. The company on Thursday said it hoped to receive cash proceeds of £44m on completion of the deal, including around £9m of cash within the sold businesses. It now plans to and focus on its two core public service and experience divisions.

Mitie hailed record full-year revenue on Thursday as it posted a jump in operating profit, boosted by contract wins, renewals and acquisitions. In the 12 months to the end of March, revenue rose to a record £4.05bn from £4bn a year earlier, while operating profit grew to £117m from £72m.

Passenger transport operator FirstGroup described a “robust” full-year performance on Thursday, with revenue totalling £4.76bn - a decrease of £829m year-on-year. The company said its adjusted operating profit reached £154.4m for the 52 weeks ended 25 March, which was down £72.4m.

Niche electronics maker DiscoverIE Group reported a 70% rise in annual profits, driven by a strong order book. The company on Wednesday said pre-tax profit for the year to March 31 came in at £29.1m. Revenue was up 18% to £449m.

Pharmaceuticals giant GSK announced on Wednesday that the European Commission has granted authorisation for ‘Arexvy’ - an adjuvant respiratory syncytial virus (RSV) vaccine - for active immunisation to prevent RSV-caused lower respiratory tract disease (LRTD) in adults 60 and older. The company said it was the first time an RSV vaccine for older adults had received European marketing approval, adding that it was scheduled to launch ahead of the upcoming 2023-2024 RSV season, which typically starts in the autumn.

Specialist real estate investment trust LXi REIT reported a 36.1% increase in EPRA earnings per share in its full-year results on Wednesday, to 8.3p. The company said its adjusted cash earnings per share also rose in the 12 months ended 31 March, by 17.5% to 6.7p, primarily driven by cost savings resulting from the merger with Secure Income REIT.

Semiconductor wafer product specialist IQE announced on Thursday that chief financial officer Tim Pullen had resigned from his position. The AIM-traded firm said his departure would take effect from 6 June. It said Neil Rummings, who had been with the company since April 2017, would step into the role of acting CFO with immediate effect.

Online fashion retailer N Brown posted a fall in full-year profit and revenue on Tuesday in a "challenging market". In the 53 weeks to 4 March, adjusted pre-tax profit declined to £7.5m from £43.1m a year earlier, on revenue of £677.5m, down 5.3%. N Brown said the drop in revenue reflected "challenging online market conditions".

Cigarette and vaping products maker British American Tobacco held full-year revenue and profit guidance on Tuesday, with trading weighted towards the second half. The company on Tuesday said it expected a 3 - 5% rise in organic revenue on a constant currency basis for 2023 and mid-single digit growth in adjusted earnings, although it warned the timing of the transfer of its Russian and Belarusian businesses would have an impact.

Genuit said on Tuesday that chief financial officer Paul James plans to step down after five years in the role to become CFO of a privately-owned company. James will remain in post up to 30 September to ensure a smooth transfer of responsibilities, while Genuit kicks off the process to appoint a successor.

Paragon Banking lifted its full-year guidance for net interest margin and mortgage lending on Tuesday, and increased its buyback programme, sending shares sharply higher. In its results for the six months to the end of March, the company said underlying profit rose 22.2% to £128.9m, while underlying earnings per share were up 28% to 42.5p.

Energy service company Hunting announced a significant development in its expansion strategy through a 10-year strategic partnership with Zhejiang Jiuli Hi-Tech Metals on Monday, for the supply of corrosion resistant alloys (CRA) for various applications. The firm said the partnership would focus on the supply of corrosion resistant alloys for oil country tubular goods (OCTG), carbon capture, utilisation and storage (CCUS), and geothermal applications.

Addiction treatment-focussed pharmaceuticals company Indivior announced on Monday that its subsidiary Indivior Inc has successfully reached an agreement to resolve the claims brought against it by the attorneys general of 41 US states and the District of Columbia.

Capita is reportedly facing possible legal action after the outsourcer was hit by a cyberattack earlier this year. According to The Times, law firms including Leigh Day are considering filing lawsuits after being contacted by people who believe they were affected by the attack, which resulted in client data being stolen by Russian hackers.

UK paper and packaging maker Mondi on Monday said it was terminating a $1.17bn sale of its largest Russian plant to an investment vehicle owned by a Russian billionaire due to a "lack of progress" in getting he required approvals. A deal to sell Mondi Syktyvkar, a pulp, packaging paper and uncoated fine paper mill located in the capital of Russia's Komi Republic to Augment Investments - controlled by Russian billionaire Viktor Kharitonin - was agreed in August last year. Shares in the firm were down 3% in London on the news.

Economic news

Consumer campaign group Which raised concerns over Tesco's pricing practices on Friday, suggesting that the lack of clear pricing on the majority of its food and drink promotions could be violating the law. Which said it had reported the grocer to the competition regulator, and was calling for the inclusion of vital pricing information on loyalty card offers.

The UK housing market saw a modest recovery in May, a closely-watched survey showed on Thursday, although rising interest rates and stubborn inflation continued to weigh heavily. According to the latest RICS UK Residential Market survey, there was an improvement in both demand and agreed sales in May.

The UK watchdog for payment systems unveiled new obligations for lenders and payments outfits with a view to helping more victims of Authorised Push Payment fraud to recover their funds. "In delivering this step-change, the UK will be at the forefront of the fight against APP fraud globally," Payment Systems Regulator managing director, Chris Hemsley, said.

The global economy is forecast to grow moderately this year as inflationary pressures ease, but a recovery was still some way off, the Organisation for Economic Co-operation and Development (OECD) said in its latest forecasts. The Paris-based organisation is now forecasting growth of 2.7%, up from 2.6% in its March report, with upgrades for the US, China and the eurozone.

Annual house prices fell in May for the first time since 2012 amid surging mortgage costs, according to data released on Wednesday by Halifax. House prices declined 1% on the year following 0.1% growth in April. On the month, prices were flat in May following a 0.4% decline the month before, and the average price now stands at £286,532.

Mergers and acquisitions activity in the first quarter of 2023 experienced a decline compared to the previous quarter, according to data released on Tuesday by the Office for National Statistics (ONS). The report showed that a total of 356 M&A deals took place between January and March, involving both domestic and cross-border transactions with a change in majority ownership and a value of at least £1m.

Ryanair, Europe's largest low-cost airline, was forced to cancel a significant number of flights on Tuesday, as a result of ongoing strike action by air traffic control (ATC) workers in France. The walkouts had led to the cancellation of about 400 flights, according to the Irish carrier.

The UK construction sector saw an uptick in activity last month, a closely-watched survey showed on Tuesday, although higher interest rates continued to weigh heavily on house building. The latest S&P Global/CIPS UK Construction Purchasing Managers' Index nudged up to 51.6 in May from 51.1 in April and came in comfortably above consensus expectations of 50.8. A reading above the neutral mark of 50 indicates growth, while one below it suggests contraction.

UK retail sales growth slowed in May, industry data showed on Tuesday, despite a succession of bank holiday weekends. According to the latest BRC-KPMG Retail Sales Monitor, total retail sales increased by 3.9% in May, or by 3.7% on an underlying basis. That was an improvement on May 2022, when retail sales fell by 1.1% and 1.5% on an underlying basis.

New car registrations rose 16.7% in May, according to industry figures released on Monday, but are still lower than pre-Covid pandemic levels. The Society of Motor Manufacturers and Traders (SMMT) said 145,204 new cars were registered in May compared with the same month a year ago. It is the longest period of year-on-year growth in new car sales since 2015.

International events

Inflation in China remained at low levels in May, official data showed on Friday, as the country’s economy continued to struggle post-pandemic. According to China’s National Bureau of Statistics, the producer price index tumbled 4.6% last month, the steepest year-on-year drop since February 2016 and larger than April’s 3.6% fall.

Tightness in the US labour market eased during the preceding week, as filings for jobless claims rose to the highest since October 2021. According to the US Department of Labor, in seasonally adjusted terms, first time unemployment claims increased by 28,000 over the week finishing on 3 June to reach 261,000.

The Eurozone has tipped into recession, official data showed on Thursday, after a series of downward revisions. According to Eurostat, the statistical office of the European Union, GDP fell by 0.1% in the first quarter when compared the previous three months, revised down from an earlier estimate for growth of 0.1%.

The Bank of Canada on Wednesday lifted its benchmark interest rate to 4.75% as it battled to stem persistent inflation amid worries that it could get stuck above its 2% target. The bank had been holding rates steady since January after eight prior rises to the previous level of 4.5%. They are now at their highest level in 22 years.

German industrial production rose less than expected in April, according to data released by Destatis on Wednesday. Orders rose 0.3% on the month following a 2.1% decline in March, and versus expectations for a 0.6% increase. March’s fall was revised down from 3.4%.

China’s exports fell last month in another indication that the rebound in the world’s second-largest economy was losing steam. Exports fell by 7.5% in May to $283.5bn on an annual basis, a sharp reversal from the increase of 8.5% in April, data released by China Customs showed.

Retail sales in the Eurozone stagnated in April, official data showed on Tuesday, missing expectations for a small uptick. According to Eurostat, the statistical office of the European Union, the seasonally-adjusted volume of retail trade was 0.0% in the Eurozone, after falling by an upwardly-revised 0.4% in March. Expectations had been for a 0.2% improvement.

Weak demand continued to weigh heavily on the Eurozone construction sector, a closely-watched survey showed on Tuesday, despite input price rises starting to ease. The HCOB Eurozone Construction PMI Total Activity Index fell to 44.6 from 45.2 in April, the sharpest monthly reduction so far this year. A reading above the neutral mark of 50 indicates growth, while one below it suggests contraction.

German factory orders unexpectedly fell in April as large-scale orders dropped, according to figures released on Tuesday by Destatis. Orders declined by 0.4% on the month following a revised 10.9% slump in March, and versus expectations of a 3% jump. Excluding large-scale orders, there was an increase of 1.4% in April on the month.

US services sector activity slowed unexpectedly last month amid slower new order growth while stockpiles piled up, the results of a closely followed survey showed. The Institute for Supply Management's services sector Purchasing Managers' Index retreated from April's reading of 51.9 to 50.3. That compared to a consensus forecast of 52.5.

Reporting by staff and contributors for Sharecast.com.