Weekly review

Equity view

Crest Nicholson confirmed on Friday that it had rejected two, unsolicited takeover approaches from Bellway, the latest valuing the group at about £650m. Under the terms of the latest offer, received on 7 May, Crest shareholders would receive 0.093 new ordinary shares in Bellway for each of their shares.

Vodafone Group is reportedly looking to sell its whole $2.3bn stake in India's Indus Towers through stock market block deals next week. Vodafone currently owns 21.5% of the mobile-tower operator. The final size of the stake sale is yet to be decided and could be lower if demand is insufficient.

British supermarket chain Tesco on Friday held annual guidance after reporting a 4.6% jump in UK first-quarter sales, but the £10m pay packet for company boss Ken Murphy was the only number in focus. UK retail sales on a like-for-like basis for the 13 weeks to May 25 came in at £11.3bn as the company said its UK market share had grown 52 basis points to 27.6% as it clawed back customers from its main rivals amid the cost-of-living crisis.

Budget computer maker Raspberry Pi saw a significant jump in its shares on Friday morning, as retail investors began trading its stock. The company’s shares surged 16% in early trading, reaching 478p - a 70% increase from its initial public offering (IPO) price earlier in the week, according to the Independent.

Financial advisory firm St. James's Place has appointed the chief financial officer of Credit Suisse's UK operations as its new CFO, replacing Craig Gentle who will be retiring from the business after six years leading the finance function. Subject to the necessary regulatory approvals, Caroline Waddington will join the board in the second half of the year, at which point Gentle will step down as a director.

Halma reported another year of record profit and revenue on Thursday as it hailed a solid performance in the safety and the environment & analysis sectors. In the year to the end of March 2024, adjusted pre-tax profit rose 10% to £396.4m on revenue of £2.03bn, up 10% on the previous year.

Renishaw announced significant changes to its board on Thursday, with Sir David McMurtry, who co-founded the company over 50 years ago, set to step down as executive chairman. The FTSE 250 firm said he had been a pivotal figure in its success, serving both as chief executive officer and executive chair.

Pub and hotel operator Fuller, Smith & Turner hiked its annual dividend by a fifth and announced a new share buyback after a strong performance in the year to 30 March, in which adjusted profits surged 61%. The company said it intends to buy up to 2.5m shares, which at Wednesday's closing price of 720p values the repurchase at up to £18m. This will take the total buyback programme since a share placing in 2021 to 6.5m shares.

Insurance, retirement and investment services group Legal & General has announced a £200m share buyback as it set out plans to restructure the business into three core units and promised to increase shareholder returns. "The strategy and targets set out today signal L&G's ambition and commitment to invest to grow our business, and reward our shareholders for their support," said chief executive António Simões.

DFS warned on profits again on Wednesday as it pointed to weaker demand and Red Sea disruption. The company said that since its interim results update on 19 March - in which it issued a profit warning - consumer demand in the upholstery sector has remained challenging and Red Sea routing issues have persisted, resulting in delays to customer deliveries and higher freight costs.

HSS Hire tanked on Wednesday as it announced the loss of a key customer. The tools and equipment hire firm said that following a re-tender process, Amey informed the group it had decided to move to another supplier for the provision of its equipment rental managed service contract.

Molten Ventures reported a gross portfolio value of £1.379bn in its final results on Wednesday, a slight increase from £1.371bn year-on-year, as net assets grew to £1.251bn from £1.194bn. The FTSE 250 venture capital firm said that despite a challenging market environment, it still made notable investments totaling £65m from its balance sheet, while also investing £37m through its managed EIS/VCT funds.

Aircraft and defence engineering specialist Senior said it had won 10-year production contracts worth $80m from Collins Aerospace to supply thrust reverser structural components for Boeing 787, Airbus A320neo and Airbus A220 aircraft. Deliveries started in January for Boeing and will commence January 2025 for Airbus, with the parts made at Senior's factory near San Diego in the US.

Bus and train operator FirstGroup hiked its dividend by 45% after a substantial jump in annual profits, despite revenues slipping slightly over the year. However, the company said that while a number of risks facing the business had reduced during the year, helped by an improved inflationary outlook, challenges to do with industrial relations “still persist”.

Shares in Oxford Instruments surged on Tuesday after the industrial and scientific research tech group announced plans to simplify its corporate structure alongside full-year profits that came in ahead of expectations. Oxford Instruments said significant overlap between business units and markets meant its structure has become "overly complex", and it now plans to consolidate its eight business units and six end-markets into just two divisions with three core markets.

GSK has started the process of appealing a recent decision by the Delaware Superior Court regarding the ongoing Zantac, or ranitidine, litigation, it announced on Tuesday. The court’s ruling, which allows plaintiff expert testimony, had been deemed inconsistent by GSK with how the Daubert standard had traditionally been applied in both Delaware and federal courts.

Pennon Group chose David Sproul, a former global deputy CEO at Deloitte, as its Chair Designate. A chartered accountant, Sproul was also chair at Starling Bank, as well as serving as a non-executive director at asset manager Safanad, a senior adviser at Bridgepoint Europe and was the Chair designate at University of Hertfordshire.

Chemring said it had signed a 15-year deal partnering deal with US defence firm Northrop Grumman for the supply of HMX energetic material used in its missile programmes along with an order for the product worth $83m as demand for military weapons increased globally. The deal, made through the company's Norwegian subsidiary Chemring Nobel, "supports Northrop Grumman's efforts to expand its munitions manufacturing production in response to growing customer demand", Chemring said on Monday.

Commercial property investment group CLS Holdings has offloaded two properties for a combined £10.7m, shedding non-core assets that were initially acquired as part of a larger portfolio purchase. The Aqueous II, Aston Cross Business Park in Birmingham and the Hansastrasse office building in Dortmund were both sold or unconditionally exchanged within the past two weeks.

Triple Point Social Housing REIT reported a robust performance in the first quarter on Monday, with a significant increase in rent collection and ongoing rental growth. As of 31 March, rent collection rose to 93.3%, up from 90.2% in December, while 25 of the company's 27 lessees showed no material rental arrears.

Economic news

Expectations for inflation have fallen to a three-year low across the UK public, a Bank of England survey showed on Friday. Publishing its quarterly Inflation Attitudes Survey, the BoE - which is due to publish its latest decision on interest rates next week - said the average Briton expected price growth to be 2.8% in the next 12 months.

UK house prices fell in May, an industry survey showed on Thursday, as the market's recovery lost momentum. According to the Royal Institution of Chartered Surveyors’ May Residential Market Survey, the net house prices balance slid to -17 from -7 in April. It marked the lowest reading since January.

The Bank of England is expected to start cutting the cost of borrowing this August, a Reuters poll found on Wednesday. In a survey of 65 economists carried out by Reuters, all but two predicted that the BoE's Monetary Policy Committee would reduce the cost of borrowing in August. It would be the first cut since 2020.

The UK economy stagnated in April, according to figures released by the Office for National Statistics on Wednesday, having just come out of a recession a month earlier. GDP was flat, in line with analysts’ expectations, following 0.4% growth in March.

Embattled UK Prime Minister Rishi Sunak has promised almost £17bn in tax cuts in an effort to kick-start his faltering election campaign that sees his Conservative Party trailing badly in the polls ahead of the vote on July 4. A re-elected government would cut national insurance again with an ultimate aim to axe the levy altogether and reintroduce a help-to-buy scheme for people seeking to purchase a home, according to the party’s manifesto published on Tuesday.

The share of outstanding UK mortgages in arrears rose to its highest level in nearly eight years in the first quarter of 2024, according to statistics released on Tuesday by the Bank of England, as elevated borrowing costs took their toll on household finances. The value of outstanding balances with arrears was up 4.2% over the first three months of the year at £21.3bn, 44.5% higher than the first quarter of 2023, the central bank said.

Heathrow served a record number of passengers over the past year after the busiest-ever May, the UK airport announced on Tuesday. Some 81.5m passengers used the hub airport in the 12 months to May, up 13.9% on the equivalent period the year before.

Wages grew faster than expected in the three months to April, according to figures released on Tuesday by the Office for National Statistics, dashing hopes of a rate cut this summer. Total pay including bonuses rose 5.9% in the three months to April, coming in above expectations of 5.7% growth. Meanwhile, growth for the previous three-month period was revised up to 5.9% from 5.7%.

International events

The cost of goods purchased overseas by the US declined unexpectedly in May. According to the Department of Labor, the country's Import Price index fell at a month-on-month pace of 0.4% (consensus: +0.1%).

The Eurozone trade balance moved into surplus in April, official data showed on Friday, although the amount came in below market expectations. According to first estimates from Eurostat, the European Union’s statistical office, the surplus in trade in goods was €15bn in April, compared to a deficit of €11.1bn in April 2023.

Germany is lobbying the European Union to soften or even scrap a proposed tariff hike on Chinese-made electric vehicles, it was reported on Friday. According to Bloomberg, citing an unnamed source familiar with the matter, government officials in Berlin are understood to be optimistic that the EU will find a solution through direct talks with Beijing.

The Bank of Japan kept lending rates on hold in its latest decision overnight on Friday, and announced plans to reduce its substantial bond purchases, with detailed tapering plans set to be released at its July meeting. That move would be a step toward unwinding its massive monetary stimulus, including a near-$5trn balance sheet.

The number of people in the States filing for unemployment benefits moved higher during the preceding week. According to the Department of Labor, in seasonally adjusted terms initial unemployment claims increased by 13,000 over the week ending on 8 June.

Wholesale inflation in the US dipped somewhat unexpectedly last month. According to the Department of Labor, so-called final demand prices fell at a month-on-month pace of 0.2% in May (consensus: 0.1%).

Beijing has urged the European Union to abandon newly-announced tariffs on Chinese electric vehicles, accusing it of “politicising” trade. Brussels told car manufacturers on Wednesday that following an investigation, it would provisionally apply duties of between 17% and 38% on imported Chinese EVs from next month.

Eurozone industrial production unexpectedly ticked lower in April, official data showed on Thursday. According to Eurostat, the statistical office of the European Union, seasonally-adjusted industrial production eased 0.1% in the single currency bloc, compared to an 0.5% improvement in March. Analysts had been expecting a small 0.2% uplift.

Luis de Guindos at the European Central Bank expressed confidence that interest rates were headed lower still, but perhaps more slowly than anticipated. Speaking at a "Livestreamed MNI Connect" event in London, the ECB's vice-president said that he did not know how many times rates would be cut before 2024 was out.

The cost of living in the States was unchanged last month, leading markets to price in higher odds of a rate cut in September. According to the Department of Labor, in seasonally adjusted terms headline consumer prices were flat in May - the first such occurrence since July 2022.

US mortgage applications soared 15.6% in the week ended 7 June, according to the Mortgage Bankers Association of America, rebounding from a 5.2% drop in the previous week and erasing the prior two week’s declines. The increase came as average mortgage rates fell five basis points amid a drop in Treasury yields throughout the period.

The European Union (EU) is set to impose tariffs of up to 38% on Chinese electric vehicles (EVs), it was reported on Wednesday, initiating duties exceeding €2bn annually and risking a trade conflict with China. The decision, as reported by the Guardian, followed a nine-month investigation into alleged unfair subsidies to Chinese battery electric vehicles (BEVs), including those from major brands like BYD, Geely, and SAIC, which owns MG.