Weekly review

Equity view

Quilter has agreed to sell its international business to life assurance company Utmost for around £483m as it looks to simplify the group and focus on its higher growth UK wealth management business. It said the sale, which has been unanimously agreed by the board, is in the best interests of shareholders "and is expected to support the continued delivery of good outcomes for customers and other stakeholders".

Personal protection manufacturer Avon Rubber said on Thursday that it had modified an existing contract with the US Army. Avon said the US Army Integrated Head Protection System low rate initial production contract had been amended, increasing the total value of the deal by an estimated $28.4m.

Airtel Africa said on Thursday that Mastercard will invest $100m in its mobile money business, Airtel Mobile Commerce. The transaction values the AMC business at $2.65bn on a cash and debt free basis. Proceeds from the deal will be used to reduce group debt and invest in network and sales infrastructure, Airtel said.

Infrastructure investor John Laing said it had sold its Glencarbry wind farm in Ireland to Greencoat Renewables for €31.2m (£26.6m) as it continued to reduce its exposure to renewable energy assets. The sale value represents a 6% premium to book value for the asset at December 31, 2020, and is equivalent to a money multiple on its investment of 1.3 times, the company said on Thursday.

3i Infrastructure has agreed to invest €182m (£155.03m) to acquire a 60% stake in DNS:NET, it announced on Thursday, and to provide additional funding for the future growth of the business. The FTSE 250 company described DNS:NET as a “leading independent telecommunications provider” in Germany.

Russian gold miner Petropavlovsk said it expected a fall in annual production with a lower third-party contribution due to a failure to secure enough concentrate for processing. The company, which saw a boardroom shakeup last year, said it expected total 2021 gold production of 430 – 470,000 ounces (koz), down from the 548,100koz reported a year ago.

Syncona portfolio biopharma company Achilles Therapeutics said its US initial public offering (IPO) will raise $175.5m (£127.8mln). Achilles, which is developing precision T cell therapies to treat solid tumours, will place 9.7m American depositary shares (ADS) on the Nasdaq exchange at $18 each. Trading is expected to start on Wednesday.

Investment company 3i Infrastructure said on Wednesday that its portfolio was performing “well” in the second half of its financial year, describing it as “resilient” despite the continuing effects of the Covid-19 pandemic, in line with its medium-term return target. The FTSE 250 firm said income was as expected in the period since 1 October, reporting total income and non-income cash of £69m, in line with its expectations.

Video game creative and development service provider Sumo Group reported revenue growth of 40.7% in its final results on Wednesday, to £68.9m. The AIM-traded firm said that revenue growth consisted of 24% organic and 16% acquisitive growth, delivered in a year impacted by the Covid-19 pandemic.

Tile specialist Topps Tiles reported a decline in first-half revenues on Wednesday but said it expects to see a "sharp" increase in sales as Covid-related restrictions ease from April. In the 26 weeks to 27 March, total revenues fell to £103.6m from £106.2m in the same period a year ago. On a like-for-like basis, retail sales rose 2%, however.

Imperial Brands backed its full-year guidance on Tuesday as it hailed a good start to the year, with market share growth in its five priority markets. The tobacco company said its business is performing well and it remains on track to deliver full-year results in line with the guidance it gave at the annual results in November, with low-mid single digit organic adjusted operating profit growth at constant currency.

India has appealed against an order by an international tribunal to pay $1.2bn damages to Cairn Energy in a long-running tax dispute, the company said on Tuesday. Cairn in December was awarded the money, plus interest and costs, taking the current total to more than $1.7bn. The Indian government had said previously it would challenge the order.

Self-storage company Big Yellow said on Tuesday that it has bought a "prime" 0.8 acre site in Epsom, South West London, for £6.5m. The group will be seeking planning permission for a 56,000 sq ft self-storage centre on the site.

Accommodation provider Unite Students said it had sold eight properties to Aventicum Real Estate for £133m. The company on Tuesday said the portfolio comprised 2,284 beds and its disposal was part of the group's management strategy which would see it exit “a number of subscale markets, while improving alignment to high and mid-ranked universities”.

Water group Pennon said on Tuesday that it was on track to deliver "resilient financial results" in line with management expectations. Pennon stated that during the second half of the trading year it had seen a net increase in demand and associated revenues, with increased household demand more than offsetting a decline in non-household demand driven by Covid-19 related restrictions.

Financial services platform AJ Bell lifted full-year revenue guidance as it continued to see rising customer numbers in the first half. Revenue for the 12 months to September 30 was expected to be at least £6m higher than company-compiled forecasts of £136m, AJ Bell said on Monday.

Domino's Pizza Group said it had sold its Icelandic unit for ISK 2.4bn (£13.7m) in cash as it continued to divest non-UK and Ireland assets. The 23 stores in Iceland are being bought by a local consortium and the proceeds from the disposal will initially be used to reduce group debt, Domino’s said on Monday.

LXI REIT said on Monday that it has made seven separate long income acquisitions in the grocery sector from six different developers for £85m, following its £125m capital raise earlier in the month. The acquisitions comprise both pre-let forward fundings and built investments, "secured to strong tenant covenants in the structurally supported grocery sector", it said.

Intact Financial will issue CAD $250.0m (£143.95m) of 4.125% fixed-to-fixed rate subordinated notes in relation to its recommended cash offer for FTSE 250 constituent RSA Insurance. Intact stated on Monday that the notes were being offered by way of a private placement to accredited investors and would be converted automatically into non-cumulative class A shares.

Marine services company James Fisher said on Monday that Stuart Kilpatrick plans to step down from his role as finance director at the annual meeting on 29 April, after more than ten years' service. The board is commencing a search for his successor and Kilpatrick will support an orderly transition, it said.

Economic news

UK manufacturing growth hit a 10-year high in March thanks to the swift vaccine rollout and the planned easing of lockdown restrictions, according to a survey released on Thursday. The IHS Markit CIPS manufacturing purchasing managers’ index rose from 55.1 in February to 58.9 in March - its best level since February 2011.A level below 50.0 signals contraction, while a level above indicates expansion.

The UK economy grew a little more than initially estimated in the final quarter of last year but the performance for 2020 as a whole was still the worst on record amid the pandemic, according to figures released on Wednesday by the Office for National Statistics. Fourth-quarter GDP grew by 1.3%, up from an initial estimate of 1.0.% growth. This left GDP 7.3% below the fourth quarter of 2019, revised from a previous estimate of 7.8%.

Fuller, Smith & Turner announced on Wednesday that it was looking to raise around £53m in a share placing to help with the reopening of its pubs in April, as it said full-year revenues are expected to be down 80% on the year. The pub group will place 6.46m new ordinary shares at 830p each through an accelerated bookbuild, representing around 20% of the company. It has also received irrevocable undertakings from directors who have committed to contribute £225,000 in total to subscribe for shares.

British grocery sales slowed ahead of the anniversary of the first national lockdown, industry data published on Tuesday showed. According to the latest figures from Kantar, take-home grocery sales rose by 7.4% over the 12 weeks to 21 March, a marked slowdown on the growth seen in previous months. In the 12 weeks to 21 February, sales rose by 12.5%, jumping by 15.1% in the last four weeks of the period.

The City of London expects to see most of its workers return to their offices post-pandemic, the City’s political leader said on Tuesday on BBC Radio. Catherine McGuinness, policy chair at the City of London Corporation, told the broadcaster she was confident that trade would return for the cafes, pubs, restaurants and other businesses that rely on the usually teeming crowds of office workers.

Shops prices continued to fall in March, industry research showed on Wednesday, as embattled retailers discounted goods. According to the latest BRC-Nielsen Shop Price Index, shop prices fell by 2.4% year-on-year in March, in line with February’s annual fall, or by 0.1% month-on-month.

UK mortgage approvals fell more than expected in February ahead of the original stamp duty holiday deadline, according to figures released on Monday by the Bank of England. Mortgage approvals declined to 87,669 from 97,350 in January, versus expectations of a smaller drop to 95,000. Mortgage approvals were higher than in February 2020, but have fallen from a peak 103,700 in November 2020, the BoE said. Nevertheless, approvals were still well above the monthly average in the six months to February 2020 of 67,300.

Footfall across UK retail destinations rose again last week on the anniversary of the first national lockdown and as the easing of restrictions on non-essential shops draws closer, according to the latest data from retail analysts Springboard. Footfall was up 6.6% from the week before, which is a big improvement on the 0.5% jump seen the previous week. Footfall was 68.1% higher than in the same week in 2020, but remained 57.3% lower than in the same week in 2019.

Strategists at JP Morgan reiterated their positive stance on equities, notwithstanding the fact that government bond yields were very likely still headed higher. In their opinion, stocks would be able to absorb the ongoing repricing in bond prices "well", at least while the yield on the benchmark 10-year US Treasury note was below 2.0%.

Strategists at Morgan Stanley continue to favour a "relative overweight" of European equities versus other regions even though global stocks more generally are now "more accurately pricing in the positive global macro outlook." In a research note sent to clients at the weekend, Graham Secker said markets were likely due a breather with more two-way risk going forwards.

International events

Updated trial results confirmed the high efficacy of the Covid-19 shot developed by Pfizer and BioNTech, including against the new strain of the virus first detected in South Africa, which is known as B1351. The new trial data, which included that for 12,000 people who had been vaccinated for up to six months, showed that the shot was 91.3% effective in preventing Covid-19.

Manufacturing sector activity surprised sharply to the upside in March, accelerating at its quickest pace in almost four decades. The Institute for Supply Management's US Purchasing Managers' Index rocketed from February's print of 60.8 to 64.7 - reaching its highest level since December 1983.

European Central Bank chief Christine Lagarde fired a shot across the bow of financial markets participants who might be tempted to second guess the institution's commitment to keeping monetary policy easy. In remarks to Bloomberg TV, Lagarde said: "They can test us as much as they want.

Private sector employment grew by 517,000 jobs in March, according to the ADP's national employment report, the strongest gain seen since September. Job growth in the service sector significantly outpaced its recent monthly average, led by notable increases in the leisure and hospitality industry.

Economic activity in the Chicago area improved more than expected in March, according to data released on Wednesday. The MNI Chicago business barometer rose to 66.3 from 59.5 in February, hitting the best level since July 2018. Economists had been expecting a reading of 60.7. A reading above 50.0 indicates expansion, while a reading below signals contraction.

The European Union expects to receive 107m doses of the coronavirus vaccine by the end of March, 30m of which will be that developed by Anglo-Swedish firm AstraZeneca and the University of Oxford. Nevertheless, an EU Commission spokesperson left it abundantly clear that the volume of deliveries would still be well below Brussels' initial goal.

Economic confidence in the Eurozone rebounded sharply in March, returning to above its long-run average, the results of a closely-followed survey revealed. The European Commission's Economic Sentiment Index for the euro area jumped by 7.9 points from 90.9 in February to 97.7 for March.

The giant cargo ship that had blocked the Suez Canal for nearly a week was refloated on Monday, announced Egyptian authorities. The Ever Given, a 400m-long vessel, which had become wedged across the vital shipping channel, was finally dislodged allowing traffic to resume.

Chinese officials on Monday warned foreign brands to stay out of local politics after firms including H&M and Nike raised concerns about forced labour in Xinjiang. H&M, Burberry, Nike, Adidas and other Western brands were hit by consumer boycotts last week in China after negative comments regarding their sourcing of cotton in Xinjiang resurfaced.

One year on from the start of the pandemic, the Asia Pacific region's economy is still facing multiple risks, not least from an uneven recovery among countries and the possibility that new virus strains might appear, the World Bank said. Nevertheless, in its April update for the region, the multilateral lender said the region's growth wasn't knocked completely off course, growing by 1.2% in 2020, whereas in the rest of the world it had shrunk by 4.0%.