Superdry shares surged higher on Friday amid takeover speculation after an investment fund took a 5% stake in the company.

Superdry shares were over 80% higher at the time of writing on Friday.

Norwegian investment fund First Seagull has taken a 5.3% stake in the beleaguered fashion brand.

For a new investor to buy into the company after a string of poor results suggests their intentions are to reshape the business rather than support existing management and operations.

Superdry has been dogged by falling sales as its brand loses appeal among consumers.

Revenue was down more than 23% in the most recent half-year period and alluded to financial challenges that could lead to the sale of more intellectual property.

UK banks were one of the winners from the Bank of England’s suggestion that interest rates would not be cut in the short term and would remain elevated even when reduced.

Although the BoE opened the door to rate cuts, it said it would driven by inflation and not cut rates until inflation was at acceptable levels.

Lloyds, Barclays and Natwest shares were up between 1.2% and 2.9% on Friday as investors assessed the implications of elevated interest rates on banking earnings.

In the last round of UK bank trading updates, the focus was on the outlook and forecasts of Net Interest Margins in the coming period. Net Interest Margins are a key profitability metric dictated by the Bank of England’s base rate.

When the banks released their Q3 trading updates last year, a consensus was building that major central banks would cut interest rates in early 2024. If they were to do so, it would weigh on Net Interest Margins and profitability, and this was factored into the sector’s outlook.

However, after the Federal Reserve and Bank of England kept rates on hold this week and signalled they would be cautious about lower borrowing costs, UK banks will clearly enjoy higher interest rates for longer than previously anticipated.

When banks report later this month, investors will be looking forward to slightly more upbeat Net Interest Margin outlooks than at the end of last year.

Couple this with resilience in the UK economy; the environment for UK banks is becoming more favourable than the gloomy scenarios forecast in 2023.

Wizz Air was the FTSE 250’s top riser on Friday morning after the airline reported a sharp jump in passenger numbers in January as it plans to reinstate a number of routes to the Middle East.

Wizz Air shares were over 7% higher as the group announced a 14.2% increase in passengers carried in January 2024 to 4,740,815, compared to the same month last year.

Notable reinstated routes include flights between Aqaba, Jordan and Abu Dhabi which will resume on February 4th. Wizz Air also announced it will restart operations to Tel Aviv from six cities – Budapest, Sofia, Bucharest, Krakow, London and Rome – beginning in March.

The airline says it is optimising its network and adapting to dynamic conditions in order to improve efficiency and load factors going forward.

In terms of sustainability, Wizz Air reported CO2 emissions of 54.9 grams per passenger/km in January, a 7.2% increase over the same month last year. However, the airline maintains the lowest emissions among competitors on a rolling 12-month basis.

Today’s announcement will be welcome news to investors who will look forward to a strong summer bookings season with the inclusion of routes to the Middle East.

Wizz Air joined peers, including easyJet, in suspending routes to the Middle East at the beginning of the Gaza war last year.

UK building material supplier Marshalls was the FTSE 250’s top gainer on Thursday, as the group received a broker upgrade suggesting substantial upside from the current share price.

Marshall was upgraded to ‘buy’ from ‘hold’ by Berenberg, who also increased their price target to 420p from 320p.

Marshall’s shares were over 5% to the good at 296p at the time of writing on Thursday.

The company is held in Jupiter’s Rights and Issues Investment Trust, an addition made last year targeting the deep value in the company.

Speaking at the UK Investor Magazine Investment Trust Virtual Conference last year, Investment Manager Daniel Nickols explained they saw value in Marshall’s valuation compared to the historical average and felt the company was an ideal opportunity to position for the eventual recovery in the UK economy.

Marshalls trades at a trailing PE Ratio of 9.

The FTSE 100 was higher on Thursday after the Bank of England voted to keep interest rates on hold, opting to wait for inflation to fall further before bringing borrowing costs down.

The Bank of England Governor said the improvement in inflation was notable and expected it to fall further in the coming months.

However, investors may fear waiting for inflation to fall further before cutting rates may increase the risk of damaging economic consequences.

“While markets are still anticipating that rate cuts will happen this year, and are likely in the spring, this week has been too early to reduce rates and ultimately increase the spending power of consumers, which could in turn hamper efforts to get inflation back near the 2% target. There’s going to be some more short-term pain in the hope of long-term economic benefit,” said James McManus, chief investment officer at Nutmeg.

The FTSE 100 was 0.3% higher at the time of writing after retreating from the session’s best levels.

The Bank of England followed the Federal Reserve in keeping rates on hold and signalling to markets they must wait a little longer for interest rates to be cut. US stocks finished heavily in the red overnight as the Fed chair took a hawkish tone in his press conference and dashed hopes of a rate cut in March.

“US equities were rocked overnight with the market punishing big technology stocks that had failed to deliver in line with the hype surrounding AI in recent months. The S&P 500 index fell by 1.6% and the tech-heavy NASDAQ composite tumbled by 2.2%. The Federal Reserve played its part too,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.

“The Fed met and held interest rates steady. This was widely expected but Fed Chair, Jay Powell, then produced a bucket of cold water and poured it, saying that the degree of confidence that the Fed would require before cutting was unlikely to be achieved before their next meeting in March.”

FTSE 100 movers

It was surprising to see the FTSE 100 gain on the open, but investors will be encouraged UK stocks were able to withstand disappointment around US interest rates.

Constituents of the FTSE 100 were fairly evenly split between gainers and losers on Thursday, with banks and miners supporting the index and helping to offset losses in housebuilders and retailers.

Shell added 2.3% after announcing another bumper share buyback despite full-year profits sinking due to lower oil prices.

Fresnillo was the top faller as precious metals sank on the Federal Reserve’s hawkish stance.

MicroSalt, the low-sodium food technology company, had a storming introduction to London’s AIM on Thursday as the company raised £3.1m to fund the roll-out of their low-sodium salt technology.

MicroSalt shares were changing hands for 51.5p in London on Thursday, a 19% increase on the 43p admission price.

MicroSalt has developed a salt that dissolves on the tongue faster than traditional salt to deliver the same taste with less sodium. The World Health Organisation says 1.8m people die each year due to the overconsumption of salt.

The company has already secured deals with one of the world’s largest snack food businesses and is undergoing testing with a range of major food companies with the aim of reformulating their recipes using MicroSalt’s products.

MicroSalt is also in discussions with a number of UK supermarkets about reformulating their own-label food lines.

“We are delighted to announce our successful fundraise and admission to AIM, which is an important step in our development and provides an excellent platform for growth,” said Rick Guiney, CEO of MicroSalt.

Guiney continued to explain the importance of achieving their growth strategy to support global low-sodium targets that are designed to help premature deaths due to the overconsumption of salt.

“The World Health Organisation has stated ambitions to reduce sodium intake by 30% by 2025, and MicroSalt is extremely well placed to capitalise upon rising demand for lower sodium products with our disruptive, proprietary product and manufacturing process.”

The first AIM IPO of 2024

MicroSalt was the first company to list in London this year and its success demonstrates London is still a viable option for innovative companies to raise capital.

London-listed Tekcapital founded MicroSalt and remains the largest shareholder with a 77% stake in the company.

“Tekcapital’s mission is to commercialise new technologies that can improve the quality of life of the customers we serve,” said Dr Clifford Gross, CEO of Tekcapital.

“MicroSalt has established a new category of full-flavour, low sodium salt, and has demonstrated initial success in onboarding two major B2B companies to incorporate MicroSalt into their existing products and has placed its saltshakers and crisps in hundreds of stores.

“It’s become clear to us, that up until now, there hasn’t been a food ingredient that could accomplish sodium reduction without sacrificing flavour. That has now changed. We’re excited that MicroSalt has completed its IPO and we are looking forward to their future growth and success.”

Power Metal Resources shares surged on Thursday after the diversified junior miner announced a strategic funding round to accelerate exploration activities.

The funding round is notable because it was completed at a premium to the priors day’s closing day – a commendable feat in the current market, paying testament to the strength of the group’s underlying minerals portfolio.

Power Metal Resources raised £1.3 million through issuing 130 million new ordinary shares at 1.0 pence per share, a 3% premium to the prior closing price.

The financing was cornerstoned by UK high net worth investors and a strategic Saudi Arabian investor. Funds will be deployed to accelerate exploration initiatives and corporate activities across the Power Metal group.

The company has exploration assets focused on a wide range of minerals including uranium, gold, copper, lithium, and graphite, among others.

Power Metal Resources shares were 23% higher at 1.2p at the time of writing.

Shell shares were higher in early trade on Thursday after the oil giant announced another bumper share buyback despite income and adjusted earnings sinking in 2023FY.

Lower oil prices were the main culprit in the falling adjusted earnings and revenue after Brent and WTI oil spent most of 2023 trading significantly beneath 2022 prices.

Shell shares were 2.3% higher at the time of writing on Thursday.

Adjusted EBITDA fell 19% to $68.5bn in 2023FY, and Adjusted Earnings fell 29% to $28.2bn.

However, Shell has again proved to be a cash-generation machine with a Free Cash Flow of $36bn. This is lower than last year but supports the company’s valuation, especially compared to US peers.

Shell will return cash to shareholders in the form of another $3.5bn share buyback and a $0.344 dividend for Q4 2023. The dividend increased from $0.331 in the last quarter.

As expected, the integrated gas unit was Shell’s powerhouse, with a strong performance in the fourth quarter, helping contain overall earnings decline in the unit for the full year.

Upstream, Shell’s largest unit concerned with oil extraction, fared better than some may have feared, with Adjusted Earnings growing 7% to $7.9bn in Q4. Upstream Adjusted EBITDA for the full year fell 27%.

The renewables unit still remains a sideshow for Shell, and Adjusted Earnings fell 60% in the full year.