Annual house price growth below 1% for ninth month in a row
Annual house price growth in the UK has remained below 1% for the ninth consecutive month, new data revealed on Friday.
According to Nationwide’s House Price Index, house prices in August rose 0.6% year-on-year.
This follows a 0.3% annual increase recorded just a month before in July.
Prices remain unchanged month-on-month after taking account of seasonal factors, Nationwide said.
“While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months,” Robert Gardner, Nationwide’s Chief Economist, commented on the data.
“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued. Data on the number of property transactions points to a slowdown in activity, though the number of mortgages approved for house purchase has remained broadly stable,” Nationwide’s Chief Economist continued.
“Housing market trends will remain heavily dependent on developments in the broader economy. In the near term, healthy labour market conditions and low borrowing costs will provide underlying support, though uncertainty is likely to continue to exert a drag on sentiment and activity.”
The data comes just days after the pound took a hit earlier this week after news broke that Boris Johnson had asked the Queen to suspend parliament ahead of the extended Brexit date, preventing MPs from blocking a no-deal exit.
“We recently updated our research on how the proximity to either a tube, tram or railway station impacted property prices in London, Manchester and Glasgow, after taking account of other property characteristics, such as property type, number of bedrooms and local neighbourhood type,” Nationwide’s Chief Economist continued.
“Perhaps unsurprisingly, London homebuyers appear willing to pay a greater premium for being close to a station, compared with those in Greater Manchester and Glasgow.”
Markets continue rebound – politics has made August a costly month
The end is perhaps in sight for Brexit and not a moment too soon for markets. While the FTSE flirts with its new home around the 7,200 benchmark (a far-cry from July’s 7,700 level), European indices appear to have continued yesterday’s rally. This no doubt owing partly to Boris Johnson’s assertiveness and Chinese diplomacy, both of which have given hope that ongoing political impasses have some chance of being overcome.
Speaking on this mornings continued rebound, Spreadex Financial Advisor Connor Campbell comments,
“Still trading on the fumes of yesterday’s positivity, the European markets pushed slightly higher after the bell.”
“Clawing its way back to 7200, the FTSE was up 0.2-0.3%, sitting at levels that vary between a one week peak and a fortnight high. Still, unless it manages an unprecedented rally this Friday, August has been an incredibly costly month, given that it closed out July with a foray past 7700.”
“That kind of performance is echoed elsewhere. The DAX climbed half a percent to flirt with 11900, a price it hasn’t seen since the start of August; this time last month it was trading above 12450. The CAC was less eager, though a 0.2% increase kept it the right side of 5460.”
“Looking ahead – which is maybe a tad premature; the gap between morning and afternoon sessions has often been massive this month – and the Dow Jones is also set to post some milquetoast growth. A 60 point increase would put the index back above 24600; like the DAX, its best price since near the start of August, but 800 points off of where it was at the end of July.”
“Though it has tried to put on a brave face, sterling remains subdued at best. Cable is now lurking at a one-week low of $1.2185, while against the euro it is at €1.104, the currency failing to put much stock in Boris Johnson stating that he wants to ‘step up the tempo’ of Britain’s Brexit talks with Brussels. More of a mover will likely be the emergence of a cohesive plan to legally prevent a no-deal exit from occurring.”
The pound unsurprisingly slugs behind its European counterparts, but hopefully won’t face and further turbulence from political unrest during the day.
Other market and macro financial updates have come from; Parliament being prorogued, No-Deal Brexit preparations, UK GDP during the second quarter, the London Stock Exchange Group (LON: LSE), the US-China currency manipulation debacle, and analysts’ outlook for markets and currencies.
Coalition shot allows Italy to lead rally across European markets
With Italy’s Guiseppe Conte being given a shot at forming a coalition, the FTSE MIB led the continued rally of the European indices. The hollow victory of Sino-US tensions temporarily cooling off was still being enjoyed by markets, and the UK’s characteristically muted rally meant its performance lagged behind its mainland European counterparts.
Speaking on movements made this afternoon, Spreadex Financial Analyst Connor Campbell stated,
“Already inexplicably happy following some positive, if familiar and insubstantial, trade war chatter from both sides of the divide, the return of Giuseppe Conte as the head of a new Italian coalition gave the markets license for a big rebound on Thursday.”
“Overjoyed at the (theoretical) removal of one major issue from the globe’s rather unappealing macro-buffet, the FTSE MIB was understandably the hottest index, leaping almost 2% higher. Almost as ebullient was the CAC, which climbed 1.5% to touch 5450, followed by the DAX, the German bourse crossing 11840 thanks to a 130 point surge.”
“The Dow Jones, likely more interested in the relatively conciliatory tone struck by Washington and Beijing than goings on in Italy, added 260 points as the bell rang on Wall Street. That just about lifts the Dow to 26300, a rather sharp recovery from 25350 lows seen at the start of the week.”
“The FTSE echoed the gains in the Eurozone, if not quite with the same level of giddy enthusiasm. Its 0.8% rise left it 15 or so points short of 7200, but did push the index to its best price in a week.”
“One day on from Boris Johnson’s most explicit attempt so far to strong arm the country into a no-deal Brexit, the pound seemed to be playing the waiting game. The currency did fall against the dollar and the euro, but without any of the drama seen in Wednesday. What the cross-party opposition to the Prime Minister’s plans does next could be key for sterling heading into September.”
Today’s rally was a breathe of fresh air, we still wouldn’t discourage readers from looking into inverted risk assets such as gold and silver. Precious metals do well during a downturn, and with recession indicators popping up each week, expect investors to turn in their direction with increasing fervour over the next few months. Other market and macro financial updates have come from; Parliament being prorogued, No-Deal Brexit preparations, UK GDP during the second quarter, the London Stock Exchange Group (LON: LSE), the US-China currency manipulation debacle, and analysts’ outlook for markets and currencies.Rebould Resources shares bounce on surprise oil discovery
Oil and gas project investment firm Reabold Resources PLC (LON: RBD) announced today that their West Newton A-2 appraisal well represents a far more significant discovery then they had previously anticipated.
Reabold holds a 24% interest in the licence through its 36% holding in Rathlin Energy, who operate the well. After initially anticipating the site was only a gas prospect, today’s announcement told shareholders that the West Newton A-2 prospect represents a ‘significant oil and gas discovery’.
Reabold Resources said initial analysis suggests a 65 metre hydrocarbon column, with 45 metres of oil underlying a 20 metre column of gas. The oil zone appears to be naturally fractured and according to logs and core, has encouraging porosity.
The Company said the Extended Well Test was paused in order to optimise the evaluation of the oil column.Reabold Resources comments
Stephen Williams, Co-CEO of the Group, stated,
“The realisation that we appear to have a 45 metre oil column is a significant and exciting development in the evaluation of this cornerstone asset. We particularly look forward to further analysis and testing results, as well as a proposed updated CPR, as, alongside our partners, we establish the optimum forward programme to maximise value out of this field for Reabold shareholders.”
“In addition, the next well at West Newton will be planned to target the deeper Cadeby formation, which has the potential to add significant further resource upside. There are also other follow on exploration targets within this extensive licence area.”
Investor notes
Following today’s news, the Group’s shares rallied 12.00% or 0.15p to a close of 1.40p a share 29/08/19 16:01 BST. The Group’s market cap is £55.88 million, neither their p/e ratio, nor their dividend yield are available.Elsewhere in the oil and gas sector, there have been updates from; Eco Atlantic Oil and Gas Ltd (AIM: EOG), Valeura Energy Inc.(LON: VLU), President Energy PLC (LON: PPC), Mosman Oil and Gas Limited (AIM: MSMN) and Nostrum Oil and Gas PLC (LON: NOG).
McColl’s revenues and sales down amid ‘challenging’ environment
British convenience store operator McColl’s Retail Group PLC (LON: MCLS) saw moderately disappointing fundamentals for the third quarter of the financial year, following a period of strategic readjustment.
The Group said that they were undergoing a reduction and optimisation of their store base during Q3, and said this round of results reflected this change, a difficult trading environment and some of the poor performance owed to poor weather.
McColl’s booked a 2.2% reduction in LFL sales during Q3, alongside a 3.6% dip in total revenue. This followed a 0.1% in LFL sales and 1.2% revenue decrease on a year-on-year comparison for the full-year to-date.
The Company did say though, that it had made good progress on its operations and strategy. It was continuing to review its product ranges and had opened four new convenience stores opened during the third quarter.
McColl’s comments
Jonathan Miller, Chief Executive, said,“As we outlined in our interim results, this has been a highly unseasonable summer for the retail sector and our sales performance reflects both this and the ongoing macro-economic uncertainty.”
“The fundamentals of the convenience channel are strong and our focus remains on good retail execution whilst maintaining strong capital discipline. We continue to make operational progress and we anticipate results in line with expectations for the full year.”
Investor notes
Despite remaining steady for most of the day, the Company’s shares dipped 2.38% or 1.15p to 47.25p a share 29/08/19 15:10 BST. Peel Hunt analysts reiterated their ‘Buy’ stance on McColl’s stock, while Liberum reiterated their ‘Hold’ stance. The Group’s p/e ratio is 7.26 and their dividend yield stands at 8.42%. Elsewhere in retail and on the highstreet, there have been updates from; Boohoo Group PLC (LON: BOO), Burberry Group plc(LON: BRBY), Associated British Foods plc (LON: ABF), H&M (STO: HM-B) and Sports Direct International Plc (LON: SPD).Shefa Gems confirms mine progress in half year report
Shefa Gems (LON:SEFA) released its half year report on Thursday pointing to significant progress in the testing of their gem mines in Northern Israel.
The London-listed company is in the developmental stage of it’s gem stone mining operations and gave a positive update on its progress.
Shefa has conducted a technical economic evaluation report for their Kishon Mid-Reach project that judged the mine to have an 11-year life with a capital expenditure of between $11.3 – $7.5 million.
The report paves the way to trial mining in 2020 depending permission from the Ministry of Energy Natural Resources Administration Israel.
The company is pursuing a ‘mine-to-market’ strategy through an exclusive range of jewellery with designer Yossi Harari.
On a financial perspective, the company has recently completed a £1 million placing to fund the development of its mining assets.
Avi Taub, CEO of Shefa Gems, commented:
“The first half of the year been very successful for Shefa Gems as we have accomplished many of our goals. These include completing the TEE report, receiving official recognition on a new mineral in nature named Carmeltazite, discovered by Shefa Gems, and found in its gemstone, the Carmel Sapphire™, discovery of the first naturally occurring Vanadium metal hydride, receiving an independent valuation of our precious stones, and concluding the bulk sampling in Kishon Mid-Reach Zone 2.”
“These achievements have put us in a strong position to advance with our target milestones for the rest of the year and beyond. In particular, we are focused on securing a mining license for Kishon Mid-Reach Zone 1 which will enable us to commence trial mining during 2020 and consequently begin producing revenue.
“Alongside our exploration activities we plan to develop our ‘Mine to Market’ strategy which entails creating unique pieces of jewellery with Shefa Gems’ precious and rare gemstones which will be marketed worldwide. We are busy developing additional marketing channels which underscores the unique assemblage of precious stones in the land of Israel.”
China hints at resuming negotiations, markets lift
Comments from China’s commerce ministry today have shown China is once again searching for diplomatic resolution of ongoing Sino-US tensions. Markets reacted positively during Thursday morning trade, all shaken by this year’s political tensions and ready to break down should the world’s parent countries continue arguing.
Speaking on the market’s behaviour this morning, Spreadex financial analyst Connor Campbell commented,
“The markets managed to muster some rebounding energy on Thursday, clinging to any positive hints regarding the trade war.”
“While Trump’s team weren’t particularly enthusiastic in their most recent comments – Stephen Mnuchin said that Washington is ‘planning’ for a Chinese visit at some indeterminate point in the future, while Peter Navarro was keen to state that ‘it’s unlikely anything quick will happen’ considering the ‘structural basis of the problems – investors appear to have taken heart from the morning’s commerce ministry briefing from Beijing.”
“China reiterated that it is opposed to further trade war escalation, and that the two sides remain in contact with the aim of continuing negotiations, perhaps in September. That seems to have been enough to cause some decent growth; the DAX and CAC rose half a percent-plus apiece, while the FTSE added 0.3%.”
“Plunging on Wednesday as Boris Johnson upped his attempts to strong arm the country into a no-deal Brexit, the pound didn’t exactly steady on Thursday, but managed to keep its losses at the lower end of the spectrum. Falling 0.2% against the dollar and euro, sterling is under $1.22 against the former and €1.1001 against the latter. The currency is now going to be watching those opposed to the Prime Minister’s plans to see if they can come up with a cohesive, effective way of trying to avert disaster.”
The world will continue to hold its breathe. Leaders and citizens alike will hope Boris Johnson can pull a One-Nation Conservative triumph out of the hat, and pray he doesn’t use a Brexit scenario as a cheap and narrow-sighted opportunity, that benefits only a small number of individuals and companies. Other market and macro financial updates have come from; Parliament being prorogued, No-Deal Brexit preparations, UK GDP during the second quarter, the London Stock Exchange Group (LON: LSE), the US-China currency manipulation debacle, and analysts’ outlook for markets and currencies.Goals Soccer Centres up for sale
Goals Soccer Centres was put up for sale on Thursday following accounting issues.
Owner of Sports Direct (LON:SPD) Mike Ashley holds a significant stake in the soccer centre operator.
Shares in the soccer centre operator were suspended back in March.
Earlier this month, it was revealed that the accounting issues were much deeper than expected – a £12 million tax accounting scandal that stems back at least a decade.
“It has become very recently evident that there has been improper behaviour within the company,” Goals Soccer Centres said at the beginning of August.
Goals Soccer Centres said on Thursday in a company statement that it has commenced a process to invite offers for the business and its assets.
“This process is being conducted by Deloitte LLP, and follows their previous appointment as advisors to assess future corporate options for the company, announced on 18 June 2019,” Goals Soccer Centres said.
“There is no certainty as to the timetable or outcome of this process. Shareholders will continue to be kept informed of developments as appropriate,” the company added.
In July, Mike Ashley’s Sports Direct faced some issues with the publication of its preliminary results, sending shares in the business crashing.
Sports Direct blamed the complexities surrounding the integration of House of Fraser, which it purchased last year, for delaying the publication of its results.
According to the BBC, one analyst called the delay of results “an utter shambles”.
Sports Direct was also involved in a back and forth chess game with Debenhams earlier this year.
Goals Soccer Centres employs roughly 700 people and had a market value of £20 million when shares were suspended, according to Sky News.
Shares in Sports Direct International plc (LON:SPD) were trading at +1.65% as of 12:35 BST Thursday.
Amigo changes annual expectations, shares plunge
Guarantor loans provider Amigo said on Thursday that it will be “resetting” expectations for its current financial year.
Shares in Amigo (LON:AMGO) were sent crashing on the announcement.
The company said in its results for the three month period ended 30 June that loan book growth is expected to be broadly flat.
Additionally, it said that impairment to revenue ratio will be low to mid 30% and cost to income ratio is expected to be in the low 20% range.
Its net debt/tangible equity remains unaffected, as does its dividend.
“The change in economic outlook, and the potential for regulatory change, means we are taking a more cautious approach to lending and have increased provisioning,” Amigo said in its results.
Amigo said that given the deteriorating economic outlook, it expects impairment to remain at a higher level than it previously expected.
Amigo’s warning of deteriorating economic conditions comes just after the pound took a hit yesterday when news broke that Boris Johnson had asked the Queen to suspend parliament ahead of the extended Brexit date.
“New customers continue to choose Amigo as we provide a valuable product that improves their lives by giving them fair and transparent access to credit – to buy a car, to put down a rental deposit or to consolidate expensive debts,” Hamish Paton, CEO of Amigo, said in the results.
“Our guarantor loan product occupies a space in society that is making a real difference to the lives of our customers, many of whom cannot access credit from their bank or building society,” the CEO continued.
“Amigo is both a responsible and profitable lender. We are focused on our future returns and building a sustainable business for the long term.”
“We are accelerating investment in our operations to enable continued delivery of best in class customer service and further enhancing credit and conduct policies.”
Amigo is based in Bournemouth and provides loans of up to £10,000 to those with poor credit histories.
Shares in Amigo Holdings PLC (LON:AMGO) were down 36.69% as of 10:14 BST Thursday.