Weekly review

The FTSE 100 ended the week down 43.1 points, or 0.52%, closing at 8,229.99 on Friday.

Equity view

Investec Group projected a stable financial performance for the first half in an update on Friday, despite economic uncertainties earlier in the year. The company said it expected pre-provision adjusted operating profit for the half-year to range between £520m and £550m - a 6.7% to 12.9% increase compared to the same period last year.

Bridgepoint slid on Friday after a group of 103 current and former employees and some related entities sold 14.7m shares in a placing. According to terms seen by Bloomberg, the shares were priced via JPMorgan and Morgan Stanley at 340p each. This is an 11% discount to the last closing price.

Modular housing company Eco Buildings Group has received a preliminary order of 5,000 square metres of walling from R&T Sh.p.K. for installation as a permanent perimeter wall around a residential tourist site in Albania. Eco Buildings said on Friday that it was also in detailed negotiations to provide the buildings making up this development and expects to be able to provide a further update in the near term.

Volution said on Friday that it has agreed to buy Fantech Group in Australasia from Elta Group for up to AUD280m (£144m). The price includes an initial consideration of AUD220m (£112.9m) on a debt/cash free basis, with a further non-contingent consideration of AUD60m (£30.8m) payable a year after the completion date.

UK defence company Babcock held annual guidance as underlying profit rose in the first five months of the financial year. In a trading update ahead of the company's annual general meeting on Thursday, Babcock said trading for the period to August 31 had been "encouraging".

Bytes Technology said on Wednesday that trading has remained strong since it updated the market at its annual meeting in July. In an update for the half-year to the end of August, the software, security, cloud and AI services specialist said gross invoiced income and adjusted operating profit growth were comfortably in the double digits at around 13.5% each, while gross profit growth was about 9%.

Hill & Smith said on Thursday that it has appointed Rutger Helbing as chief executive officer with immediate effect. The appointment follows an extensive process, supported by an external executive search firm, that considered both internal and external candidates, it said.

Online grocer and logistics group Ocado has upgraded its revenue guidance for its retail division following a strong third-quarter performance which saw revenues jump as both customer numbers and the number of orders rose. Ocado Retail, a joint venture between Ocado Group and M&S, is now targeting low double-digit percentage growth in sales over the year to 3 December, from the £2.8bn generated last year. That’s up from earlier guidance for mid-high single-digit growth given in July.

Segro said it had priced €500m of senior unsecured bond issue for an eight-year term at 123 basis points above euro mid-swaps with an annual coupon of 3.5%. The proceeds will mainly be used to refinance existing debt, with a focus on bank loans maturing in early 2026. As a result, the average cost of debt (including joint venture debt at share) falls to 2.6% from 2.7% at 30 June 2024 and the average duration increases to 7.3 years from 6.8 years at 30 June, Segro said on Wednesday.

AstraZeneca has received the green light for its Fasenra drug in the US, used to treat patients with a rare inflammatory disease. Fasenra, otherwise known as benralizumab, is used to treat adult patients with eosinophilic granulomatosis with polyangiitis or EGPA – an immune-mediated vasculitis (inflammation of small to medium-sized blood vessels) that can result in damage to multiple organs.

Grocery store investor Supermarket Income REIT hailed a resilient performance during its most recent financial year, growing rental income and profits despite ongoing macro challenges, as it delivered an optimistic outlook for the year ahead. Supermarket Income REIT, who generates 75% of its rental income from Tesco and Sainsbury's alone, owns a portfolio of 73 stores including 17 Carrefour stores in France.

Online greeting card and gift retailer Moonpig backed its full-year guidance on Wednesday as it said trading has been in line with expectations. In an update ahead of its annual meeting, the company said growth has been underpinned by consistent strong sales and orders performance at Moonpig and is supported by steady progression at Greetz towards positive sales growth.

Japan's health ministry has accepted for review a new drug application (NDA) for GSK's Blenrep blood cancer treatment, marking the third major regulatory filing acceptance for the drug. This follows marketing authorisation application acceptance by the European Medicines Agency in July and by the Medicines and Healthcare products Regulatory Agency in the UK earlier this month.

Gambling technology firm Playtech said on Tuesday that it has agreed to sell its Italian business, Snaitech, to Paddy Power owner Flutter Entertainment for €2.3bn in cash. Once the deal completes, Playtech said it will focus on its "technology-led offering in high-growth B2B gambling markets with an accelerated growth plan and an extensive portfolio of strategic ventures".

Private equity group Petershill Partners has reiterated its guidance for 2024 after a solid first half, with double-digit growth in partner fee-related earnings and assets under management, as it announced a special dividend following a recent disposal. The $258m sale of its entire stake in LMR Partners back to its management team, announced on 4 September, has enabled Petershill to return $97m (or 9.0 cents a share) to shareholders, in addition to the 5.0 cents-a-share interim dividend.

Life sciences investor IP Group reported a wider half-year loss and lower net asset value against what it called a “challenging” economic backdrop but said there were signs that conditions were improving with increased “appetite” for its portfolio. The intellectual property company, which invests in university and research-based firms, said losses for the six months to June 30 widened to £110m from £54.5m a year earlier. Net asset value fell to £1.07bn from £1.31bn.

Pensions, savings and life insurance provider Phoenix reported a 15% increase in adjusted operating profits in the first half and reiterated its medium-term targets for earnings and cash generation. Phoenix also announced it was pulling the disposal of its SunLife division, which sells financial products to the over-50s, just three months after putting it up for sale given "current uncertainty in the protection market".

Close Brothers said on Monday that chief executive Adrian Sainsbury has taken a temporary medical leave of absence from the business. The merchant bank said it has put in place "robust" temporary cover arrangements to ensure continuity in the delivery of its strategy. Group finance director Mike Morgan will assume Sainsbury’s principal responsibilities, supported by chairman Mike Biggs and members of the senior management team.

HgCapital Trust, the FTSE 250-listed investor in European and transatlantic software and services businesses, reported a 6.4% increase in net asset value (NAV) in the first half, with double-digit revenue and profit growth achieved across its top 20 investments. NAV per share increased to 527.9p from 500.5p at the start of the period, with net assets rising to £2.4bn. The company recorded a share price total return of 12.7% over the period, giving the company a market cap of £2.2bn.

Octopus Renewables Infrastructure Trust reported a net asset value total return of 2% for the first half on Monday, an improvement from 0.9% in the same period last year. The London-listed firm increased its target dividend for the full year 2024 to 6.02p per share, marking a 4% rise in line with the consumer price index (CPI).

Economic news

Bank of England rate-setter Catherine Mann said on Friday she took a "guarded" view about cutting rates, as there was still a risk inflation was becoming embedded. The US economist, who is a member of the Monetary Policy Committee, voted on Thursday in favour of keeping the cost of borrowing unchanged at 5%.

Retail sales hit their highest level in more than two years in August, official data showed on Friday, beating expectations. According to estimates from the Office for National Statistics, retail sales volumes rose 1% in August, following an upwardly-revised 0.7% increase in July. Volumes were at their highest levels since July 2022.

Higher-than-expected borrowing in August pushed public sector net debt to 100% of GDP, official figures showed on Friday. According to the Office for National Statistics, public sector borrowing - the difference between spending and tax revenue -reached £13.7bn in August.

UK consumer confidence fell sharply in September, a long-running survey showed on Friday, despite the more stable economic backdrop, as people nervously wait on next month’s Budget. The latest GfK Consumer Confidence Index came in at -20, a seven-point slide on August’s reading.

The Bank of England left the cost of borrowing unchanged at 5% on Thursday, as widely expected, but hinted at further cuts to come. The Monetary Policy Committee, which cut interest rates for the first time in four years in August by 25 basis points, opted to leave them unchanged by a majority of 8 to 1. External member Swati Dhingra voted for another 25 bps cut, to 4.75%.

UK house prices rose for the fifth successive month in July, official data showed on Wednesday, as the market continued to bounce back. According to the latest UK House Price Index from HM Land Registry, average house prices rose 0.6% since June. Year-on-year, they rose 2.2%, although that was down on a revised estimate for growth of 2.7% in the 12 months to June. As a result, the average property in the UK now costs £289,000.

Sales growth across the UK’s grocery sector slowed over the last month, industry data showed on Wednesday, as shopping habits returned to normal after the long summer break. According to data from research firm NIQ, total till sales growth was 4% in the four weeks ending 7 September, down from the 5.5% rise seen in the previous month.

UK inflation was unchanged in August, according to figures released on Wednesday by the Office for National Statistics, remaining above the Bank of England’s target. Consumer price inflation was 2.2% in the year to August, in line with expectations and above the BoE’s 2% target. Services inflation rose to 5.6% in August from 5.2% in July, also as expected.

UK manufacturers experienced a mixed start to the second half of 2024, with domestic orders weakening but exports performing well, according to the quarterly Make UK/BDO Manufacturing Outlook survey released on Monday. Factory output dropped to a balance of -2% in the third quarter, down from +9% in the second quarter, marking the first time that production has contracted since late 2020, the report showed.

The UK housing market strengthened in September, industry research showed on Monday, as prices ticked higher and the number of agreed sales jumped. According to the latest house price index from Rightmove, average new seller asking prices rose 0.8% this month, double the long-term average. Year-on-year, prices rose 1.2%. The national average asking price is now £370,759.

International events

Officials at the Bank of Japan decided to leave interest rates unchanged on Friday, as the central bank upgraded its few on consumption and signalled greater confidence in the economic recovery. In a unanimous decision, policymakers said the benchmark short-term interest rate – known as the uncollateralized overnight call rate – would remain at 0.25%. This was in line with market expectations.

German industrial producer prices fell 0.8% in August year on year due to lower energy costs, official data revealed on Friday. Prices were higher for capital, consumer and intermediate goods, said Federal statistical office Destatis, adding that overall prices rose 0.2% compared with July.

Existing US homes sales fell to a 10-month low in August despite a fall in mortgage rates during the month, according to data published on Thursday, although mortgage applications pointed towards a pick up this month and October. Sales decreased 2.5% month on month to 3.86 million the National Association of Realtors said.

Manufacturing activity in the Philadelphia region unexpectedly expanded in September after contracting sharply the previous month, though current indicators for the industry still remain mixed. According to the Federal Reserve Bank of Philadelphia, the current general activity index for manufacturing jumped from a seven-month low of 7.0 in August to 1.7 last month, surpassing the -1.0 reading expected by economists.

Americans lined up for unemployment benefits at a decelerated pace in the week ended 14 September, according to the Labor Department, beating market expectations. Initial jobless claims fell by 12,000 to 219,000, a four-month low that, while better than market expectations for a reading of 230,000, remained well above the average seen earlier in 2024.

European automakers have called on governments for "urgent relief measures" before new emissions targets for cars and vans come into effect next year, as sales of battery-electric vehicles (BEVs) across the region continue to fall. The call comes as the European Automobile Manufacturers’ Association (otherwise known as ACEA) reported new car registrations data for August, which showed that the BEV market share tanked by a third last month.

The US central bank surprised markets with a half percentage point interest rate cut. However, rate-setters in Washington D.C. also emphasised that they would not necessarily continue to loosen policy at that same pace. The target range for the federal funds rate was lowered by 50 basis points to 4.75-5.0%.

US housing starts surged 9.6% month-on-month in August to an annualised rate of 1.35m, according to the Census Bureau, beating market expectations for a reading of 1.31m. Housing starts rebounded from an almost 7% decline in the previous month to register the sharpest monthly increase seen in nine months, with starts for single-family homes up 15.8% at 992,000, more than offsetting a 6.7% decrease in starts of homes with five or more units to 333,000.

Inflation in the eurozone fell to 2.2% in August from 2.6% a month earlier, confirming a flash estimate two weeks ago, according to official data published by the European Union on Wednesday. The figure also compared with a 5.2% increase last August. European Union annual inflation was 2.4% in August 2024, down from 2.8% in July. A year earlier, the rate was 5.9%.

US industrial production bounced back in August, rising much more than economists had expected, according to data released on Tuesday by the Federal Reserve. Industrial output increased by 0.8% last month – the biggest monthly gain since February – following a 0.9% fall in July. Analysts had expected a rebound of just 0.2%.