Global economy set to grow, says IMF
The pace of global economic growth is rising, according to a new report from the International Monetary Fund, with growth forecasts upped from 3.1 percent in 2016 to 3.5 percent this year.
Writing in the IMF’s new World Economic Outlook, Maurice Obstfeldt said “we could be at a turning point”, adding that the IMF sees buoyant financial markets and “a long awaited cyclical recovery in manufacturing and trade”.
The UK’s economy is likely to grow by 2 percent this year, according to the report, with stronger growth than any of the major developed economies apart from the US despite the threat of a Brexit-related slowdown.
This figure is only slightly below what the IMF predicted a year ago, ahead of the EU referendum.
However, the IMF report does indicate several possible threats facing the economy, including “pressures for inward looking policies in the advanced economies”.
Protectionist policies represent a large problem to economic growth, with Mr Obstfeldt saying: “Capitulating to those pressures would result in a self-inflicted wound, leading to higher prices for consumers and businesses, lower productivity, and therefore, lower overall real income for households.”
Strong first quarter trading sees Bonmarche shares soar
Shares in women’s budget retailer Bonmarche (LON:BON) rose nearly 6 percent in early trading on Wednesday, after a trading update showed a strong start to the year.
Sales for the 14 weeks ended 1 April 2017 increased by 2.7 percent on the same period last year. Like-for-like sales in-store decreased by 0.5 percent, but this was offset by a 15.2 percent rise in online sales.
The first quarter of the year shows an improvement on the full year figures, which show like-for-likes sales drop by 4.3 percent and online sales grew by 2.2 percent.
Helen Connolly, Chief Executive Officer of Bonmarche, acknowledged that post-Christmas trading conditions had been “challenging” but fitted with the group’s previous guidance:
“Store like-for like sales were negative in January but stronger during February and March, and we also saw the resumption of growth in online sales following improvements made to our online offering”, Connolly said.
“Whilst we expect the apparel market to remain challenging during the coming financial year, we are actively taking measures to improve our proposition to customers.
“We remain confident that Bonmarché remains unique in its ability to serve the needs of its target market and that the successful implementation of our plan will allow us to deliver growth in FY18, despite the challenging market”, she concluded.
Shares in Bonmarche are currently trading up 5.27 percent at 78.95 (0930GMT).
AB Foods shares boosted after 36pc profit jump
Primark owner Associated British Foods (LON:ABF) saw profits jump in the first half of the year, alongside a more optimistic outlook on the year ahead.
Group revenue rose 19 percent to £7,296 million in the 24 weeks to March 4th, with adjusted operating profit up 36 percent to £652 million.
The group, whose business engages in the grocery, sugar, agriculture, ingredients and retail sectors, saw adjusted profit before tax also take a hefty boost, up 35 percent to £624 million.
The company said its sugar business, AB Sugar, had benefited from a rise in sugar prices and “significant savings” achieved as a result of performance improvements.
Its retail brand Primark also had a strong six months, with revenue increasing by 12 percent on a comparable basis with last year at constant currency.
George Weston, Chief Executive of Associated British Foods, said:
“The underlying growth of the group at constant currency was strong in the first half. Primark delivered a substantial increase in selling space which, together with its strong consumer offering, contributed to a further increase in our share of the total clothing market. Furthermore, we achieved a more acceptable rate of return in Sugar and further good progress was made by our Ingredients and Grocery businesses.”
Shares in AB Foods are currently up 2.24 percent to 2,779.00 (0914GMT).
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United Airlines shares continue to trade down after viral footage
Shares in American air carrier United Airlines (NYSE:UAL) continued to trade down on Wednesday, after footage showing a man being forcibly removed from his seat went viral over the weekend.
A video surfaced of United Airlines security dragging a man from his seat after the flight was overbooked, ending with him sustaining injuries. The incident provoked outrage from the public, and is likely to significantly damage the carrier’s brand.
Their share price continued to drop at the start of the week despite statements from United’s CEO, Oscar Munoz. The incident is the second to cause controversy for the airline over the last couple of weeks, after it attracted strong criticism on social media for refusing to allow two teenage girls to board a flight because they were wearing leggings.
Shares in United Continental Holdings are currently trading down 1.13 percent at 70.71 (1131GMT).
Profits up 81 percent at JD Sports, despite ‘prison-like’ warehouse allegations
Sports store JD Sports (LON:JD) reported record profits on Tuesday, with a boost to fashion fitness wear sending shares up nearly 10 percent.
Operating profit at the group rose 55 percent in the year to January 28th, with revenue hitting £2,378,694. Profit before tax saw an impressive 81 percent increase, marking record annual figures for the company.
The group’s other chains, outdoor stores Millets and Blacks, both made money for the first time since their acquisition by JD. Like-for-like sales, which strip out the impact of new stores opening, grew 10 percent over the year.
Peter Cowgill, Executive Chairman, called the year a “period of very significant progress for the group”, adding that it was an “outstanding performance and provides the group with a robust platform for further development”.
However, he warned on the effects of an uncertain economy going forward, adding that “we must recognise that there are external influences which may impact the latter part of the year, notably inflationary pressures arising from Brexit”.
Arguably such strong results were slightly unexpected, with the group having been subject to significant controversy over the course of the year.
A Channel 4 undercover investigation in December showed workers saying conditions at its Kingsway distribution centre in Rochdale were “worse than a prison”, sparking an independent investigation undertaken Deloitte in order to review the allegations.
Women investing in stocks and shares up 53 percent, says Selftrade CEO
Investment platform Selftrade saw a significant increase in the number of women opening a stocks and shares ISA over the past few months, with numbers up 53 percent compared to the same period in 2016.
Men still opened more ISA accounts over the period, but the gap closed significantly. In 2016, 76 percent more men opened ISA accounts than women, but in 2017 this figure fell to 34 percent.
Mark Taylor, CEO of the Selftrade platform, commented: “It’s promising to see concrete evidence that more women are engaging with the world of investing. For so long we have seen women shy away from the stock market and stick to cash savings.
“While there is some way to go before we reach parity, this is a positive step forward. We meet a lot of women who feel investing is “not for them” – they often think it’s “male-dominated”, “complicated” and “unaffordable”.
“The message we are keen to get across is that investing is for everyone. Having a monthly direct debit into a stocks and shares ISA for as little as £50 a month is a great way to dip your toe in the water without throwing yourself in. We can only hope industry figures echo our own and that more women are engaging with investing”.
Across the board the platform saw a significant increase in ISA activity over the season, ahead of the new tax year. According to the company, the top traded stock this ISA season was Lloyds Banking Group, followed by BP and Vodafone, with the iShares Core FTSE 100 UCITS ETF GBP also making the top 10.
Article 50 triggered, FTSE resilient but pound sinks
Britain has now triggered Article 50, setting both the FTSE 100 and the British pound off on a volatile course.
The FTSE sunk during Prime Minister’s Question Time as Theresa May confirmed that her letter triggering Article 50 had been delivered to Brussels. However, it has since moved upwards, currently trading up 0.31 percent at 7366.83.
The British pound remained largely flat on the news, but has since sunk 0.125 percent against the dollar.
Andrew Sentance, a senior member of the Bank of England’s monetary policy committee, warned of uncertainty over the next two years as negotiations kick off:
“Most likely, we face another two years of uncertainty before a new relationship between the UK and the EU is properly agreed. During this period we will probably see some bouts of financial volatility affecting the value of the pound and reduced business and financial confidence.”
Tesco shares fall after supermarket agrees to pay £129m fine
Supermarket giant Tesco has agreed to pay a fine of £129 million to avoid prosecution for its false accounting scandal, causing shares to plunge at market open.
The company overstated its profits between February and September 2014, sparking a two year probe by the Serious Fraud Office. It has now reached a deferred prosecution agreement, as well as an agreement already in place with the FCA to pay around £85 million in compensation to investors.
Alongside these two figures, Tesco will also pay legal costs associated with the agreements. The total exceptional charge is expected to be £235 million.
Dave Lewis, the chief executive of Tesco, said: “I want to apologise to all those affected. What happened is a huge source of regret to us all at Tesco, but we are a different business now.”
He added that the company was “committed to doing everything we can to continue to restore trust in our business and brand”.
The agreement to pay several fines is not admittance of guilt, and the FCA stated in a ruling that it is not suggesting the Tesco board of directors knew, or could reasonably be expected to have known, that the information in the company’s trading statement in August 2014 was false or misleading.
Tesco (LON:TSCO) shares are currently trading down 0.08 percent at 189.80 (1135GMT).
Dow Chemical and DuPont merger given the go-ahead by EU
US chemical giants Dow Chemical and DuPont are set to merge, after the deal was given the go-ahead by the European Commission on Monday.
The merged company will be worth around $130 billion and is expected to lead to cost savings of $3 billion. The European Commission had raised concerns that the merger of the two largest US companies would stifle competition in the sector, and the deal remains dependent on the sales of several substantial assets. “We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment,” European Competition Commissioner Margrethe Vestager said in a statement. “Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future.” The merged company, DowDuPont, will eventually be split into three companies focusing on agriculture, materials and speciality products. Dow said in a statement: “Longer term, the intended three-way split is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each company will be a leader in attractive segments where global challenges are driving demand for their distinctive offerings.” The is the first of three big deals in the sector, with ChemChina’s bid for Syngenta on its way to approval and a deal looking set to be approved between Bayer and Monsanto within the new few months.