Belluscura announced successful fundraising on Monday and said it had enjoyed robust investor demand for a previously announced convertible loan note placing.

On 12 June, Belluscura announced a proposed placing of convertible loan notes. The company reports significant interest from both new and existing investors, with an update on final terms, including issue size, expected shortly.

In addition, Belluscura has successfully raised £300,000 from an investor through a subscription of new ordinary shares. This subscription was completed at 15p, representing a 7.7% discount to the closing mid-market price of 16.25 pence per share on 21 June.

The company plans to use the net proceeds from this share subscription for working capital purposes.

Last year, Belluscura recorded a step change in order intake and revenue generation after receiving approval for its oxygen concentrator units across Asia.

The funds raised from this round will be allocated to meeting these orders and supporting further revenue growth.

In our last note we remained cautious as the market looked vulnerable to some profit taking. This has not occurred in any scale, yet. Will this profit taking emerge or can this pace of buying continue?

We still stay skewed to the negative view, and can see the market dropping back to the previous upside resistance, now support, around 5,400 in the first instance, and then could slip down towards the previous resistance level, black line, currently around 5,150.

The Hindenburg Omen signal gained a lot of coverage this week as the S&P 500 is flashing up this signal which traditionally has helped to pick out tops in the market around 2-6 months before a 20-30% correction.

The signal essentially looks at the ratio of new 52 week highs and new 52 week lows, on the hypothesis that in a healthy positive market there should be a strong ratio of new weekly highs to lows. When the ratio of new highs to lows moves back towards parity, or even under, it signals that the market is pushing up to new highs only due to a few high profile names.

Which can be an early warning signal as then it only takes a market turn in a sector or two, or in just a few names, to pull the market lower. Currently this is the AI boom. Clearly AI will revolutionise the world at least as much as the internet has over the past 25 years. The issue is that, like the dotcom bubble of 2000, investors have been too quick to buy into any stock with any affiliation with AI. There will be a few huge winners with AI over the next decade. However the likelihood is that like the internet, this will be limited to a few huge winners, and not spread across the whole sector.

As a result the AI bubble could yet burst, and this would allow the Hindenburg omen to be proved correct in a few months time. Like last week, we are not calling the top of the market here, but we do feel that the underlying sentiment is one of greed at the moment, when this pivots to one more of fear there is now considerable downside.

So we would recommend a hold, take profits or even trading short position for the more active traders, as we wait to see how the market reacts when the heat starts to come out of the current sentiment.

The election shouldn’t bring too much in the way of excitement in equity markets. Everyone knows that – failing a monumental polling discrepancy that would render the entire industry not fit-for-service – Labour will be in power post 4th July. 

That said, such events have the potential for volatility, and a solid set of dividend payers can help smooth out any bumps in the road.

Legal & General shares would have historically given us a head start in compiling a selection of FTSE 350 dividend payers. However, its recent capital management targets involved reducing dividend growth to a meagre 2% in the coming years. The shares have a healthy yield, but stunting dividend growth makes the stock less attractive, and it doesn’t make the cut on this occasion. 

We explore three FTSE 350 dividend paying stocks that we feel offer not only healthy yields, but the opportunity for future dividend growth and capital appreciation.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

These three stocks also hold long-term potential and shouldn’t be viewed as a short-term trade.

NextEnergy Solar Fund

Yielding 10% and trading at a 29% discount to NAV, the NextEnergy Solar Fund Investment Trust should fare well in the coming weeks and beyond.

Over the past full-year period, the trust has expanded its portfolio of solar assets to 103 and increased installed capacity to over 1GW.

The big problem for the trust has been questions about the value of its portfolio of privately held solar assets during the higher interest rate environment. 

We’ve selected NESF, yet there are a whole host of trusts with portfolios of renewable infrastructure that are facing the same problem. 

The big attraction to the trust over its peers is its yield. High yields can sometimes be associated with distress. This simply isn’t the case with NESF. 

In its full-year results released this week, the trust outlined a dividend that is covered 1.3x and grew 11% in the last year. An 11% dividend hike is not a move made by a board concerned about being able to maintain payouts. 

The company has embarked on a capital management programme in the face of higher interest rates and has disposed of a number of assets, one of which provided a 100% valuation uplift on the balance sheet valuations. The proceeds of the capital recycling programme will be used to pay down short-term borrowings.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

A Labour government has also promised a big green agenda which will be generally supportive of the trust’s operations.

IG Group

IG Group provides tradeds with a trading venue for OTC derivatives, exchange-traded derivatives and stocks. It has global operations, trading under the brand IG as well as tastytrade in the US after acquiring the platform in 2021.

From a dividend perspective, IG has a 5.9% yield, which is covered 2.1x.

In recent years, the top line has grown steadily as the group wins new business and launches new offerings such as fully-managed smart portfolios and ISAs.

IG Group’s growth story is supported by solid fundamentals. In the third quarter ended 29 February, the number of new clients that traded for the first time increased to 18,000. This was higher than the previous quarter (16,600), and the same period a year ago (17,400). The key Active Clients metric for period was 266,800, an increase on the second quarter.

However, active clients are only one half of the story.

In times of volatility, IG’s account holders will have a greater propensity to place trades to take advantage of price fluctuations. A higher number of trades by its clients translates directly into higher revenue for IG. Thus, IG Group is a natural hedge against volatility.

In 2024 year-to-date, IG’s revenue is down 6% on the same period and the company has blamed ‘materially lower volatility’. Indeed, IG Group said the period year-to-date has seen the lowest volatility in the past five years.

Should financial market volatility heighten around the election, IG Group will be a beneficiary.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

AstraZeneca

AstraZeneca doesn’t pay a huge dividend. Its 2% yield isn’t anything to write home about. However, it has recently announced ambitious growth targets, which, if achieved, promise steady and measured dividend increases in the coming years.

In late May, the company set out plans to grow revenue to $80bn by 2023 as new blockbuster drugs are released to the market.

“In 2023 we delivered the ambitious $45 billion revenue goal set a decade ago,” said Pascal Soriot, Chief Executive Officer, AstraZeneca. “With the exciting growth of our innovative pipeline, which has the potential to transform millions of lives, we are now aiming for $80 billion by 2030.”

The company said they plan to ‘launch 20 new medicines by 2030, many with the potential to generate more than $5 billion’.

Should this goal be delivered – and there’s no reason to suggest it won’t – AstraZeneca’s current valuation is compelling.

AstraZeneca currently trades at 19x forward earnings. This may be considered a touch expensive compared to the benchmark, but this doesn’t take into consideration growth beyond next year.

The dividend was flat between 2022 and 2023 but the group increased payouts in 2024. The impact of capex and the pandemic slowed dividend hikes in recent year and investors will be encouraged to see the company return to the path of a dividend progression.

Download ‘5 Stocks that could benefit from a Labour government’ Special Report

Brokers generally have a favourable view of the stock with Berenberg recently upgrading their price target to 15,000p.

UK retail sales helped the FTSE 100 off to a strong start but the gains didn’t hold and the index dipped as trade progressed.

On Friday, investors digested a mixed set of UK economic data, including worrying government borrowing stats, stronger-than-expected retail sales, and poor service sector figures, and sold UK-listed as a result.

The FTSE 100 was down 0.5% at the time of writing with analysts focusing their concern on public borrowing figures.

“The last time net debt represented the same proportion of GDP revealed today was when the Beatles had yet to enjoy a number one single, TV was in black and white and the country was still paying off debts accumulated during the Second World War. It shows the difficult task facing whoever occupies Number 10 after next month’s election,” said AJ Bell investment director Russ Mould.

After the Bank of England held rates at 5.25% yesterday and hinted at a possible August rate cut, we are now set for a summer of ‘will they, won’t they’ debate about interest rates. This holding pattern in the narrative was reflected in equity markets on Friday as the FTSE 100 dipped slightly into the weekend amid mixed macro developments.

“It’s a quiet end to the week on the corporate news side of things, meaning there isn’t too much else for the FTSE to hang its hat on,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

Although FTSE 100 constituents earn the lion’s share of their revenue overseas, news the UK consumer is in rude health wasn’t lost on UK retail stocks such as Ocado, JD Sports, and Burberry who were among the few gainers on Friday.

Ocado was 1.5% higher after it rebounded from heavy selling yesterday but didn’t erase anywhere near the extent of the losses.

“Ocado recovered some ground after being squashed like a tomato yesterday on news its Canadian partner had exited their exclusive deal and halted expansion plans,” Russ Mould said.