Weekly review

The FTSE 100 ended the week 54.55 points higher, closing at 7,537.90 on Friday.

Equity view

Mitie Group said it had bought P2ML, a specialist telecoms tower design company for £2.1m on a cash and debt-free basis. The deal will further expand Mitie’s telecoms acquisition, design and construction capabilities after the acquisition of DAEL Telecoms last year.

Primary Health Properties said it had bought a newly refurbished clinical facility in Chertsey, Surrey for £6.95m. The property is let on a new 20-year lease to the Surrey and Borders Partnership NHS Foundation Trust and benefits from RPI led rent reviews.

Homewares retailer Dunelm revealed on Friday that Karen Witts will take over as chief financial officer on 9 June. Witts, who joins Dunelm from Compass Group, will succeed Laura Carr, who will step down from the board on 8 June. Prior to this Witts was CFO at Kingfisher Group from 2012 to 2019 and also held a number of senior finance, strategic and operational roles with Vodafone Group between 2010 and 2012, and at BT Group between 1999 and 2010.

Primary care property investor Assura said it had agreed a development funding agreement for a £31m cancer diagnostic and treatment centre in Guildford. The building will be operated by and let to Genesis Cancer Care UK Limited on a 30-year FRI lease with annual, index-linked rent reviews.

Self-storage outfit Safestore has acquired the remaining 80% of its Netherlands and Belgium-focussed joint venture with Carlyle Europe Realty. Safestore said on Thursday that it will part with a total of €139.0m in cash for the joint venture, including the share purchase of €67.0m, with a further €67.0m to go towards refinancing existing borrowings and another €5.0m to cover transfer taxes and other deal costs. The acquisition was funded from the group's existing loan facilities.

Royal Bank of Canada is buying UK wealth manager Brewin Dolphin in a £1.6bn agreed deal. The bank is paying 515p a share, a 62% premium to Wednesday’s closing price. RBC added that it expected “limited” job losses in “functional and administrative areas”.

HICL said it was selling its 100% interest in the Queen Alexandra Hospital project to InfraRed European Infrastructure Income Fund 4. HICL said it was selling its 100% interest in the Queen Alexandra Hospital project to InfraRed European Infrastructure Income Fund 4. Proceeds to HICL will be £108m, with profits from the sale representing a 1.5p a share increase on net asset value to HICL's valuation at September 30, 2021.

Food and beverage ingredients provider Tate & Lyle said on Thursday that it had agreed to acquire Chinese prebiotic dietary fibre business Quantum Hi-Tech Biological for $237.0m. Tate & Lyle stated the acquisition of Quantum, which engages in the research, development, production and sale of fructooligosaccharides and galactooligosaccharides, was fully aligned with its strategy to become a growth-focussed food and beverage solutions business and would strengthen its position as "a leading global player" in the fast-growing global dietary fibres market.

Russia-focussed gold producer Petropavlovsk said on Wednesday that it was in the early stages of discussions with advisers and Gazprombank relating to a potential restructuring of the group's debt. Petropavlovsk stated that following the inclusion of Gazprombank on the UK sanctions list, it had been prohibited from repaying more than $10.0m it owed to the bank as a consequence of the regulations.

Gold miner Polymetal maintained annual production guidance and said operations in Russia and Kazakhstan continue undisrupted amid sanctions on Moscow for its war with Ukraine. The company on Wednesday said bullion sales remained unaffected by sanctions on Russia as a result of the country’s invasion of Ukraine. Production guidance for 2022 of 1.7 Moz of gold equivalent remained in place.

Aviation services firm John Menzies said on Wednesday that it has agreed to be bought by Kuwait’s Agility for £571m in cash. Under the terms of the acquisition, Menzies shareholders will receive 608p a share, which is an 81% premium to the closing share price on 8 February, the last business day before the commencement of the offer period.

UK competition investigators have raided the offices of outsourcer Mitie and are examining the emails of senior staff, after the Home Office raised concerns about suspected anti-competitive behaviour, according to media reports on Wednesday. The Competition and Markets Authority (CMA) is examining the relationship between Mitie and US firm PAE, who operate a joint venture for the Ministry of Defence but were also competing to run Home Office immigration removal centres, at Derwentside, in County Durham, and Heathrow Airport.

Online betting company 888 Holdings said it has signed an agreement with five industry veterans to form a new joint venture that will operate its brands across selected African markets. The company on Tuesday said it had invested in a minority stake in 888AFRICA, with the option to increase this to take control, and ultimately own up to 100% of the venture in the future. No financial details were disclosed.

Drugmaker AstraZeneca revealed on Tuesday that its Ondexxya asset had become the first approved medicine in Japan to specifically reverse the anticoagulant effect of Factor Xa inhibitors, providing "a major advance" in the treatment of patients hospitalised with life-threatening bleeding. AstraZeneca stated the approval by the Japanese Ministry of Health, Labour and Welfare was based on positive results from its ANNEXA-4 Phase III clinical trial, which showed Ondexxya "rapidly and markedly" reversed anti-FXa activity in patients with acute major bleeding.

Polymetal International said it was considering changes to its corporate structure including "distinct ownership in various jurisdictions" where the company operates. Responding to press reports, the Russia-focused miner said its deliberations were at an early stage.

Bellway announced a big increase in its dividend and a reduction in dividend cover as the housebuilder reported an 8.9% increase in underlying first-half profit. Underlying pre tax profit for the six months to the end of January rose to £327.2m from £300.5m a year earlier as revenue increased 3.5% to £1.78bn. Statutory pre tax profit rose 9.8% to £307.6m.

Utilities company National Grid has agreed to sell a 60% equity interest in its UK gas transmission and metering business to a consortium of long-term infrastructure investors. National Grid said on Monday that it will receive approximately £2.2bn in cash for its NGG unit from a consortium made up of Macquarie Asset Management and British Columbia Investment Management Corporation. National Grid will also receive approximately £2.0bn from additional debt financing at completion.

The European Union has given marketing approval to AstraZeneca's Evusheld coronavirus medicine for adults and children over 12 years old, the company said on Monday. AstraZeneca said the drug, also called AZD7442 reduced the risk of coronavirus symptoms or death from Covid-19, both when taken preventively and within three days of developing symptoms.

Car dealership Inchcape said on Monday that it has bought a 70% stake in Ditec - the distributor of Porsche, Volvo and Jaguar Land Rover in Chile - for an undisclosed sum. The deal expands Inchcape's brand footprint, adding first-time distribution relationships with Porsche and Volvo, and further broadens its coverage with Jaguar Land Rover to 12 markets from eight in 2019.

Refractory products supplier RHI Magnesita has entered into a new joint venture with Horn & Co to accelerate its use of secondary raw materials in its products.RHI Magnesita said on Monday that it will hold a 51% stake in the joint venture, which is expected to process around 150,000 tonnes of material each year and will operate under the name of Horn & Co.

Economic news

Scotland’s railways were renationalised on Friday, as the Scottish Government took over operations from the previous franchise holder Abellio. A new government-owned company would now run ScotRail’s services and more-than-5,000 employees, after the Dutch transport company had its contract cut short amid ongoing complaints.

Ministers have quietly allowed a Chinese-owned company to take over a semiconductor plant in Wales, it was revealed on Friday, after a security review. According to Politico, the government decided not to intervene in the sale of the Newport Wafer Fab by Wingtech after its national security advisor Stephen Lovegrove spent six months looking into the deal.

The UK will reportedly join the US in releasing more oil from its reserves as part of a joint effort to lower prices and reduce reliance on Russian supplies. According to Bloomberg, an announcement is likely on Friday via the International Energy Agency. Sources declined to say the size of the release, citing market sensitivity and the need for countries to act in concert.

UK manufacturing growth hit a 13-month low in March, while business optimism fell to a 14-month low, according to a survey released on Friday. The S&P Global/CIPS manufacturing purchasing managers’ index fell to 55.2 from 58.0 in February. This was below the flash estimate of 55.5 but above the 50.0 mark that separates contraction from expansion.

Confidence among business leaders has collapsed as the invasion of Ukraine, rising costs and soaring inflation weigh heavily, a survey by the Institute of Directors has found. The IoD’s Directors’ Economic Confidence Index tumbled to -34 in March from -4 in February, the lowest level since October 2020.

The UK economy grew at a faster pace than initially estimated in the fourth quarter of last year, according to data released on Thursday by the Office for National Statistics. GDP rose by 1.3% compared to the previous quarter, up from an initial estimate of 1% growth and from revised 0.9% growth in the third quarter. That left the economy just 0.1% below where it was before the pandemic.

Shop price inflation spiked in March to reach levels not seen since 2011, industry research showed on Wednesday. According to the latest BRC-NielsenIQ Shop Price Index, annual inflation was 2.1% in March, up from 1.8% in February.

UK shoppers are increasingly turning to cheaper own brand products, industry data showed on Tuesday, as grocery inflation rose to a near decade high. According to the latest research from retail consultancy Kantar, grocery price inflation was 5.2% in the four weeks to 20 March, the highest since April 2012. In the 12 weeks to 20 March, it was 4.2%, with prices rising fastest in savoury snacks and pet food, and falling in fresh bacon.

UK consumer borrowing rose sharply in February and savings deposits fell as the cost of living increased, Bank of England figures showed. Households borrowed a net £1.9bn in consumer credit, up from £0.6bn a month earlier and almost double the pre-pandemic average of £1bn, the BoE said. Analysts on average had expected £0.9bn of extra borrowing.

Bank of England Governor Andrew Bailey has warned that the shock to real incomes from rising energy prices will be worse than those seen in the 1970s. Speaking at an event organised by Brussels-based economic think tank Bruegel, Bailey said: “In the UK and elsewhere, we are facing a very large shock to aggregate income and spending.”

International events

The European Commission has tabled proposals that would allow refugees from Ukraine to convert their hryvnia currency into euros. Under plans presented to the 27-nation bloc, those who have fled the war with Russia would be able to exchange up to 10,000 hryvnia – around €300 – without charges. EU governments have to approve the measure.

The US economy added 431,000 payrolls in March, according to the Bureau of Labor Statistics, down from the previous month's print of 750,000 and falling short of market expectations for a print of 490,000. Job gains continued in leisure and hospitality, up 112,000, professional and business services, 102,000 higher, retail trade, 49,000 stronger, and food and beverage stores and manufacturing, up 18,000 and 38,000, respectively.

Eurozone inflation surged to a record 7.5% in March amid rising energy prices, according to preliminary data released by Eurostat on Friday. Annual inflation increased from 5.9%, coming in well above the 6.6% expected and driven by rising energy and food prices. Energy inflation jumped to 44.7% in March from 32% the month before, while food, alcohol and tobacco inflation rose to 5% from 4.2%.

Eurozone manufacturing growth eased to a 14-month low in March as rising inflation and geopolitical tensions took their toll, according to a survey released on Friday. The final S&P Global/CIPS manufacturing purchasing managers’ index for the region fell to 56.5 from 58.2 in February. Still, it remained above the 50.0 mark that separates contraction from expansion.

China’ Caixin manufacturing purchasing managers’ index fell in March at its fastest pace in two years, as a resurgence in Covid cases and the conflict in Ukraine weighed. The index declined to 48.1 from 50.4 in February, coming in below the 50 mark that separates contraction from expansion and below consensus expectations for a reading of 49.9.

Inflation continued to mount in the US in February, official data showed on Thursday, putting further pressure on the Federal Reserve. According to estimates from the Bureau of Economic Analysis, annual core personal consumption expenditures reached 5.4% in February, compared to 5.2% a month earlier and 1.4% in February 2021. It is the fastest pace since 1983.

Americans filed new claims for unemployment benefits at an accelerated pace in the week ended 26 March, according to the Labor Department, with the overall figure rising by 14,000 to 202,000 - above market expectations for a print of 197,000. However, despite the increase, that figure was still close to the prior week's revised level of 188,000 - the lowest seen since 1969.

Unemployment across the Eurozone has fallen to a fresh low, official data released on Thursday showed. According to Eurostat, the European Union’s statistics office, the seasonally-adjusted unemployment rate was 6.8% in February. That was down on both January’s rate of 6.9% and February 2021’s rate of 8.2%.

Gazprom is looking at ways to halt gas supplies to so-called "unfriendly" countries, it was reported on Thursday. According to Reuters, quoting Russian daily Kommersant, the energy giant is "working on an option of a complete stoppage of gas supplies to unfriendly countries, and is evaluating the consequences of such measures".

Oil prices fell on Thursday as traders waited for an expected big release of reserves by President Joe Biden designed to stem inflation in the US economy. Biden is close to announcing the third - and possibly biggest - release of emergency oil stocks since November, according to reports. The release is expected to last several months and comprise up to 1m barrels of oil per day, the Financial Times said.