Spotify Technology (NYSE: SPOT) have gone against market expectations by delivering both profit and revenue growth in their third quarter trading update. This was caused by an influx of new users and subscribers which drove revenue gains and increasing profits. The music streaming company posted net profits of €241.0m for the three months ended 30 September, compared with €43.0m for the comparable year-ago period, which was ahead of the loss that analysts had anticipated. Additionally, revenue increased by 28% to €1.73 billion exceeding the €1.72 billion expected by analysts polled by FactSet. The rise in revenue was caused by a increase in monthly subscribers, rising by 30% to 248 million users, whilst premium subscribers increased by 31% to 113 million. In particular, developing economies saw a big increase in users with the rate of increase in the number of Latin American users accelerating for the 2nd consecutive quarter. Notably, the number of users in India outperformed forecasts seeing a 30% rise following a successful marketing campaign. The additions of Spotify Family Plan and Student discount helped boost Spotify’s users, and extra features such as including parental controls to filter explicit content seemed to be a hit. The company has remained confident that it can keep its foot holding in the music streaming software industry following competition from Apple Music (NASDAQ: AAPL), Amazon Music (NASDAQ: AMZN) and Deezer. Spotify were also quick to point out that they had added close to twice as many subscribers per month than Apple Music. The New York-listed company recently announced that chief financial officer Barry McCarthy will step down on January 15th. Paul Vogel, who is currently serving as vice president of financial planning & analysis, treasury and investor relations will take over from McCarthy. Spotify have set targets for full year revenues in the range of €1.74 billion to €1.94 billion. Shares of Spotify are trading at $135.5 USD, seeing a 3.35% drop during Tuesday trading. In the retail sector, there have been updates. Tesco (LON: TSCO) are set to trial their Clubcard plus, Dominos Pizza (LON:DOM) are set to quit international operations, and Superdry (LON: SDRY) have a new facilities management supplier.

Argentina has been facing difficulties in enacting successful economic policies following the introduction of austerity measures.

Inflation

Argentina’s inflation rate is one of the highest in the world. Only this year, Argentina’s inflation rate has increased more than 50%. The International Monetary Fund has predicted that Argentina’s GDP will decline by 1.2% by the end of 2019.

Austerity Measures

Consequently, Argentina took out a huge loan from the International Monetary Fund amid struggling with economic recession. Moreover, Argentina enacted austerity measures in order to fulfill the conditions of the loan. Austerity measures taken by the previous administration caused resentment among the public.

Presidential Election

Earlier this week, Argentina held a presidential election. The result of the presidential election reflects Argentina’s economic struggle. The public protested against the previous administration by electing a new centre-left leader. As a result, Alberto Fernández declared victory in Argentina’s presidential election.

Mauricio Macri

Following the election, Argentina’s former President Mauricio Macri accepted defeat to his left wing rival. Replacing Macri was a part of a general attempt to reject the authority measures introduced by Macri’s administration. Former President Macri supported austerity measures in an attempt to end Argentina’s economic crisis. Unlike what Macri has planned, Argentina continued to remain in economic recession for the past year.

Fernandez’ Promise

President Alberto Fernández announced that he will prioritise economic recovery during his presidential term. Furthermore, economic instability in Argentina led to a decrease in investment opportunities in Argentina.

Investment Opportunities

Investors have been cautious of economic recession and austerity measures in Argentina. An economically stable Argentina is likely to offer fruitful investment opportunities. Argentina has rich natural resources, an export-oriented agricultural sector and a diversified industrial base.

Agriculture

Argentina is one of the world’s biggest agricultural producers. For instance, agriculture accounts for approximately 9% of the country’s GDP. Argentina is one of the biggest exporters of grapes, honey, soy beans, squash, sunflower seeds, wheat, wine and yerba mate. If Argentina overcomes its economic recession, investment opportunities in agriculture are likely to increase.  

Tesco Plc (LON: TSCO) will become the first UK supermarket to offer a subscription customer loyalty scheme in an attempt to fend off comeptition from foreign supermarkets. The Supermarket Titans which include Sainsbury (LON: SBRY), Asda (who are part of Walmart) (NYSE: WMT) and Morrisons (LON: MRW) have seen market share slip as German competitors Lidl and Aldi integrate into the UK market. On Tuesday, Tesco announced they would launch a scheme which enhances the current loyalty card scheme from November 8th. 19 million Clubcard subscribers will be able to to upgrade to Clubcard Plus for £7.99 per month, which in addition to giving loyalty points redeemable for money-off vouchers will also offer 10% off two in-store shopping trips of up to £200 per month. Additionally, Clubcard Plus holders will get additional discounts on brands such as F&F, Go Cook, Tesco Pet and Fox & Ivy. Tesco Mobile has also been included with the new scheme, giving holders of Clubcard Plus double data on all Tesco Mobile plans. Analysts at Barclays said Clubcard Plus should theoretically appeal to many shoppers. “In practice it’s hard to judge the deterrent effect of the monthly fee, but early membership numbers from Casino’s similar French scheme seem promising,” they said. The new scheme estimates to boost Tesco sales by 2.5 percentage points, but the impact on profit will be harder to judge until a trading statement is released. Competitor Marks and Spencer (LON: MKS) have plans to revamp their underperforming Sparks Program. Additional perks of the new scheme will allow holders to apply for a Tesco Bank credit card with no foreign exchange fees on overseas purchases. Dave Lewis, the retailer’s chief executive, said Clubcard Plus will give customers benefits and savings across grocery stores, Tesco Bank and Tesco Mobile. We’ve put together all the benefits that are possible for a customer across Tesco for the first time,” he said on Tuesday. “It’s about rewarding loyalty,” he said, but added “we will see that in our market share”. Interestingly, Lewis denied that this scheme was in revolt to the domination of Aldi and Lidl, but it seems that the Big 4 are getting more concerned about the shape of the UK supermarket industry following rising popularity of German counterparts. Earlier this month, it was reported that CEO Lewis was set to step down. “We know that our customers are always looking for ways to make their money go further,” said Alessandra Bellini, chief customer officer at Tesco. “That’s why we’re launching Clubcard Plus – so that they can get better value on the products and services that matter most to them, throughout the whole year.” Tesco remains the biggest UK supermarket, holding 27% market share according to Kantar data. Shares of Tesco are currently trading at 238p per share. 29/10/19 14:31BST.

Last week, Members of Parliament rejected Prime Minister Boris Johnson’s timetable for debating his Brexit deal.

Brexit Update

Prime Minister Boris Johnson called for a UK general election in December amid failure to pass his timetable. Labour announced its opposition to the bill calling for an early general election. However, it seems that Labour has changed its mind amid updates from Brussels. Following the failure of his timetable plan, Prime Minister Boris Johnson unwillingly asked for another extension of the Brexit deadline.

Extended Brexit Deadline

Yesterday, the European Union announced its approval of a further Brexit extension until February 2020. The extension granted by the European Union is flexible. The United Kingdom can pass a Brexit deal before the extended deadline. In that case, conditions of the deadline extension allow the United Kingdom to leave the European Union before February 2020. Following the European Union’s approval of an extension, Jeremy Corbyn confirms that Labour supports Boris Johnson’s bill calling for a general election in December. As a result of European Union’s extension, the United Kingdom has the ability to finalise a Brexit deal after the general election takes place.

Labour’s Reaction

The European Union’s approval of an extension creates an opportunity for Labour. The outcome of Brexit will depend on general election results. The winner is likely to influence the content of a future Brexit deal. Consequently, Labour announces that the party is keen to launch one of its most radical election campaigns of its history. Jeremy Corbyn says Labour is ready for a general election now that a no-deal Brexit is off the table for the next three months. The European Union’s approval of an extension fulfilled Labour’s goal of avoiding a no-deal Brexit.

Age Restrictions

Following its approval of a general election, Labour announces that it will push to give 16 and 17 years old citizens the right to vote in the general election. The age restriction on voting in the United Kingdom had previously been lifted during the Brexit referendum. Lowering the age limit to 16 could change the outcome of the general election.

Fever-Tree

Fever-Tree (LON:FEVR), a UK based producer of premium soft drinks, achieved an annual growth rate of approximately 39% in 2019. The demand for Fever-Tree products remains high in the United Kingdom. Fever-Tree recently warned that its growth rate might slow down due to bad weather in the United Kingdom. Wet weather starting earlier this summer had a negative affected Fever-Tree’s trade arrangements negatively. Nevertheless, Fever-Tree reported an increase in its revenue from £117.3m to £104.2m in 2019. Fever-Tree’s revenue went up 13% in 2019. The company achieved growth across all of its four regions. Fever-Tree strengthened trade relations with the United States which led to further growth in revenue. The company’s global reputation improved amid increasing popularity of Fever-Tree products in Australia and Canada. Increasing demand for upmarket gin creates further opportunities for Fever-Tree to grow.

Gin

Originating in India, gin and tonic continues to be one of the most popular cocktails in the world. The recent growth of Stranger & Sons, an Indian upmarket gin brand, creates further growth opportunities for Fever-Tree. Tonic has the advantage of being a complimentary good. As demand for gin increases, so does the demand for tonic.

Increase in Demand

A recent increase in global demand for gin opens up opportunities for those who wish to invest in alcoholic beverages. Due to the increasing popularity of gin, the list of popular brands is getting longer. The United Kingdom is one of the primary suppliers of gin. It is home to popular brands such as Bombay Sapphire, Sikkim, Jodhpur, Opihr and Gin Wala. While gin originated in India, it has taken time for home grown brands to become popular in the global market due to the competitive nature of the sector.

Stranger & Sons

A new company is set to change the global role of home-grown gin in India. Stranger & Sons bottles started to appear in bars in and outside of India. Local availability of botanical plants as well as spices creates an advantage for Stranger & Sons. Stranger & Sons reduces transport costs and saves time by using locally grown ingredients. Furthermore, the company created employment opportunities in the region by hiring local employees. Global demand for Stranger & Sons’ products has been increasing. Stranger & Sons’ takes pride in the uniqueness of its upmarket gin as it includes local spices special to India.

Growth Rate

According to Drinks Market Analysis, premium bottles produced by Stranger & Sons have an annual growth rate of 20%. Production is likely to grow due to increasing global demand. However, the company faces multiple challenges.

Challenges

According to a research conducted by the Asian Development Bank, 21.9% of India’s population lives below the poverty line. The risk of selling an upmarket product in a country with such a high poverty rate is high. Stranger & Sons can overcome this challenge by diversifying its income to reduce dependency on local customers. A way to accomplish this is to become a prominent figure in the global market. The Economist predicts a 5% annual decline in the overall gin sales in India. Stranger & Sons charges approximately $40 for a bottle of its classic gin. Furthermore, some regions in India have high taxes on alcohol. Four states in India are completely dry, limiting the demand for gin in India.

Growth Potential

The company has potential for growth despite challenges posed by external factors in India. Global market for gin is competitive. India is the 55th global seller of gin in the world. If Stranger & Sons wants to improve its presence in the market, it will need to increase its global supply of gin. Nevertheless, it is relieving to know that new sources of upmarket gin are appearing in the global market.

Post- Brexit Supply

Wine and Spirits Trade Association warns consumers that a no deal Brexit might cause a gin shortage in the United Kingdom. Distillers in the United Kingdom rely on shipments from the European Union. In a time of Brexit uncertainty, it might be advantageous to search for alternative options. Growing production of upmarket gin in India can be the answer to a possible lack of supply amid Brexit.

Two Shields Investments Plc (LON: TSI) have raised £1 million of extra funds through an oversubscribed placing, which will go towards further investments into BrandShield and WeShop. BrandShield is an anti-counterfeiting, anti-phishing and online brand protection firm, while WeShop is an e-commerce-focused social network platform. Two Shields currently has an 11% shareholding in BrandShield and 6.7% stake in WeShop. Two Shields have raised £1 million through the issue of 1.00 billion shares at a price of 0.10 pence per share. This saw a 29% discount from the company’s closing price on Monday at 0.14p. “I would like to welcome our new Investors and thank existing investors for their continued support as Two Shields continues its journey and transition into the next phase of development. I have spent a considerable amount of time with both BrandShield and WeShop and I am very excited about prospects and growth trajectory,” said Chair Andrew Lawley. Additionally, in the announcement Two Shields said that Kalahari Key Mineral Exploration Pty Ltd has selected five targets in the Molopo Farms Complex project. It is notable that Two Shield hold an 18% stake in Kalahari Key Mineral Exploration Pty Ltd. The Molopo project is a nickel-copper-platinum group metals exploration project in Botswana. “Kalahari Key are rapidly advancing in Botswana to a position where they can drill the high priority targets. The initial programme will cover five very strong conductor targets and will optimise the chance of making a discovery,” said Chief Executive Paul Johnson. Kalahari Key will implement gravity surveys over the five drill targets, to eliminate any chance that the targets are graphite rather than sulphide bodies, as the former would be of interest. The decision to invest in Kalahari Key Mineral Exploration Pty Ltd shows diversification from Two Shields and a willingness to invest capital into a relatively young firm. Shares of Two Shields have dropped 10.34% during Tuesday Trading, and are currently valued at 0.13p per share. In the finance sector there have been updates. Hastings (LON: HSTG) have seen revenue falls despite increase in GWP, Integrafin (LON: IHP) have seen their annual funds rise and Georgia Capital (LON: CGEO) have seen their shares drop.

Pfizer (NYSE: PFE) have seen their third quarter profits beat market expectations and exceed many analyst reports in an impressive trading update. The Pharmaceutical titan showed higher sales of breast cancer drug Ibrance and subsequently raised its earning forecast for the financial year. The new leadership of Albert Bourla as Chief Executive has led to more streamlined operations. Dr. Albert Bourla, Pfizer’s Chief Executive Officer, stated, “We reported strong third-quarter 2019 financial results, driven by 9% volume-driven operational revenue growth in our Biopharma business, including growth from key brands such as Ibrance, Xeljanz, Eliquis, Vyndaqel and Inlyta as well as in emerging markets. Upjohn revenues were negatively impacted primarily by the July 2019 loss of exclusivity of Lyrica in the U.S., while Consumer Healthcare revenues declined as a result of the completion of the JV transaction with GSK(1) during the quarter. Additionally an announcement in July said Pfizer would separate its off-patent branded drugs business and combine it with generic drugmaker Mylan NV (NASDAQ: MYL). Ibrance sales rose 25% to $1.28 billion in the quarter, ahead of the average estimate of $1.21 billion, according to numbers compiled by brokerage UBS (SWX: UBSG) The company said it expects to earn between $2.94 per share and $3.00 per share, up from a prior estimate of $2.76 to $2.86. Analysts on average were expecting $2.82 per share, according to Refinitiv IBES. Net income accountable to Pfizer’s shareholders rose to $7.68 billion, or $1.36 per share, in the quarter, from $4.11 billion, or 69 cents per share, a year earlier. Frank D’Amelio, Chief Financial Officer and Executive Vice President, Business Operations and Global Supply, stated, “I was pleased with our third-quarter 2019 financial results, which reflect strong momentum in our Biopharma business. We updated our 2019 financial guidance primarily to reflect our financial results through the first nine months of 2019 and our confidence in the business going forward. We raised the midpoint of our 2019 guidance range for revenues by $200 million to a range of $51.2 to $52.2 billion, composed of $400 million of operational revenue improvement, partially offset by a $200 million unfavorable impact from changes in FX rates since mid-July 2019. The trading report updated by Pfizer shows strong momentum to grow and increase profits in the final quarter of 2019. This should sustain shareholder’s interest as Pfizer look to increase profits and diversify operations. Currently, shares of Pfizer are trading at $37.28 per share up 1.39% during Tuesday trading. 29/10/19 12:27BST. In the pharmaceuticals industry there have been updates. Tissue Regenix (LON: TRX) shares have fallen after warnings of lower revenues, Yourgene Health Plc (LON:YGEN) have hit their ambitious growth target, and Salarius Ltd (NASDAQ: SLRX) have secured a new patent for Microsalt.  

Galantas Gold Corp (LON: GAL) have seen their shares sink, this is due to the suspension of operations at their Omagh site. In a statement this morning, Galantas said operations were suspended due to insufficient supervision arrangements and added that it will seek strategic alternatives due to “economic impingement on the company’s operations.” As all blasting operations must be supervised by Police Service of Northern Ireland, there was a shortage of resources which halted this operation Presently police arrangements are not sufficient for the desired level of operations which has caused disruptions to Galantas. “The current arrangements are not sufficient to allow for the expansion of mine operations as envisaged by the company’s existing mine plan and until changes are agreed, the present inefficiencies caused by those arrangements form an increasing financial burden, which has proved a significant drain on the financial resources of the company,” Galantas Gold explained. The company said, as a result, it has started consultations to reduce employee numbers at the Omagh mine and save costs. Galantas, however, plans to continue with some some operations at the gold mine. The fact that Galantas have not seized all operations at the Omagh mine is a positive, as this does show plans to continue operations in the longer term, giving shareholders hope. Additionally, the benefit of not seizing operations will come as a relief to employees at the Irish mine, where their jobs are secure for the immediate short term. Since this announcement, Galantas have looked to seek alternatives such as reviewing operations, finding a joint venture partner and alternative financing structures due to the “economic impingement” on its operations. In order to implement this changes, strategies will have to be conjured in order to raise new capital and funds. Shares of Galantas Gold are trading at 2.08p per share, seeing a fall of 42.22%. 29/10/19 12:07BST. In the mining sector, Centamin (LON: CEY) have experienced a output decline, Serabi Gold Plc (LON: SRB) have shown strong production figures in their third quarter, Antofagasta (LON: ANTO) have faced tough political conditions and Europa Metals (LON: EUZ) have gained a boost in their Spanish operations.