Pantheon Resources (LON: PANR) has entered a gas sales precedent agreement with the state-owned Alaska Gasline Development Corporation, which is developing the Alaska LNG project. This is designed to supply Alaska and export up to 20 million tonnes of LNG each year. Pantheon Resources would supply up to 500 mmcf/day of gas at a maximum base price of $1/mmbtu. There are plans to increase the scale of the Ahpun development. The share price jumped 29.4% to 36.3p.

Restaurants operator Tasty (LON: TAST) gained court approval of its restructuring plan on Tuesday afternoon. Tasty has got out of the leases of 23 sites. This leaves 38 restaurants, which are predominantly the Wildwood brand. This should improve EBITDA by up to £2.1m between 2003 and 2005. The share price continued its rise today and it is up a further 29.2% to 1.55p.

Insig AI (LON: INSG) has raised a further £813,000 at 12.5p/share. New Insig AI chief executive Richard Bernstein had subscribed £100,000 at 20p/share. Insig AI recently bought a 5.45% stake in AI and blockchain company ImpactScope OU for 900,000 shares at 13.75p each and Insig Ai has an option to subscribe for more shares. The share price improved 15.7% to 14.75p.

Empire Metals (LON: EEE) considers further positive exploration results as a major development for the Pitfield prospect. There is rutile at surface, and it should be easy to mine. Titanium dioxide mineralisation gets more prevalent at lower depths. This should improve project economics. The share price increased 13.5% to 11.75p.

FALLERS

Jersey Oil & Gas (LON: JOG) has progressed its FEED programme for the Buchan development in the North Sea, but decisions have been put on hold until after the General Election. The first offshore survey has been completed. The final investment decision is expected in 2025, dependent on clarity over ongoing UK government policy, which means first oil could be in 2027. Jersey Oil & Gas contributes 20% of the joint venture project costs. The share price dipped 16.7% to 125p.

There is another fundraising by cancer biopsy company Angle (LON: AGL) is raising £8.5m at 15p/share and could raise up to £2.06m more via an open offer. The cash will be spent on additional staff, commercial development, developing lab capacity. Angle says that it should reach cash flow breakeven by the end of 2025. There was £16.2m in cash at the end of 2023. In 2023, revenues more than doubled to £2.2m and the loss was £20.1m. Interim revenues are expected to be more than £1m. The share price declined 12.5% to 15.75p.

Seed Innovations (LON: SEED) has completed its share buyback programme. This used up £510,000 on top of the £2m dividend. That followed the disposal of its Leaf Gaming stake for £2.4m. The share price declined 7.14% to 1.95p. There has been a 9.3% share price decline so far this year, but that is not adjusted for the 1p/share special dividend.

Lupus treatment developer ImmuPharma (LON: IMM) reported a reduction in loss from £4.46m to £3.42m. It has taken longer than thought to approach commercialisation of the Lupus treatment Lupuzor. There should be enough evidence to move to a phase 3 clinical study. There was cash of £200,000 at the end of 2023. ImmuPharma raised £1.5m from the sale of its shares in Aquis-quoted skincare company Incanthera, which was valued at £600,000 at the end of 2023, although it retains warrants. The share price slipped 5.36% to 2.47p.

Angus Energy shares rose on Wednesday after the company announced that is has successfully restarted production at its Brockham Oil Field in Surrey, aligning with the company’s strategy to revive operations at the site.

In late May, Angus Energy completed the workover of the Brockham 2Y well, a crucial step in reinstating production from the field. The workover involved installing a new pump in the well and conducting repairs and upgrades to the surface equipment.

After a period of flow to clean up the well, it is now back online, producing approximately 120 barrels per day (bbls/day) of total fluid, with 40% currently consisting of oil.

Investors should note Angus Energy said they will closely monitor the well’s performance over the coming days to assess its future production potential.

Angus Energy has a 80% interest in the Brockham Oil Field.

“As we stated in our last strategic update, Angus intends to expand production through organic and inorganic growth. This is the first step of that journey. We are very pleased with our progress at the Brockham Field to resume production,” said Richard Herbert, Angus Energy CEO.

“The workover was completed safely and on schedule and budget, with the new pump starting up on the 28^th May. The well is now producing oil in excess of management’s predicted flowrates and with the present surface configuration is expected to sustain 30-40 bbls/day of oil, with potential to increase further with operational improvements.”

Angus Energy shares were 6% higher at the time of writing.

The travel boom has far-reaching benefits, and the propensity for holidaymakers to spend freely on holidays and their holiday experience has helped increase WH Smith sales.

WH Smith’s UK travel unit sales rose 9% in the 13 weeks to 1 June as the business transitions to being a ‘one-stop-shop’ for travel essentials for which it can charge a premium.

Anyone who has reluctantly bought a bottle of water from WH Smith at an airport will have a good idea of the company’s strategy. WH Smith has successfully placed stores in locations where potential customers have little option but to pay the higher price they demand. In addition to airports, WH Smith has targeted rail terminals, where sales rose 8%, and hospitals. Hospital sales surged 14%.

North American sales grew 3% while Rest of the World jumped 15%.

In the UK High Street division, which includes online sales, total revenue was down 4% for the 13 weeks ending June 1, 2024. However, the store network performed well, with LFL revenue flat compared to the same period last year.

Five new Toys “R” Us shop-in-shops have been successfully opened within existing stores and plans are in place to open an additional 25 shop-in-shops by the end of the financial year.

“What’s really interesting is how WH Smith is helping to revive the Toys R Us brand. It is slowly converting parts of its UK stores to house sections dedicated to toys under this retro name and it looks like the strategy is paying off,” said AJ Bell investment director Russ Mould.

The company has maintained guidance for the year and says it is well positioned for the peak summer trading period.

WH Smith shares were 3% higher at the time of writing on Wednesday.

When the British ISA was announced by Jeremy Hunt at the recent budget it was met with mixed reviews.

Some liked the idea of encouraging more investment in UK stocks, while others lambasted the proposal as illogical and unlikely to succeed.

The move was part of the government’s efforts to rejuvenate the UK’s financial markets, alongside other initiatives such as the sale of NatWest shares. The NatWest share sale has been canned ahead of the general election and now the future of the British ISA hangs in balance.

Many within the industry think the British ISA is a nonstarter. Here are Eight reasons why AJ Bell’s director of public policy, Tom Selby, thinks it’s a bad idea, in his own words: 

1. Additional complexity risks deterring potential new ISA investors

“The extra complexity created by any British ISA will inevitably cause confusion, particularly among potential new investors. AJ Bell research shows the complexity of the current landscape – where there are already six versions of ISAs – acts as a barrier to investing and risks undermining the successful ISA brand.

“Despite 71% of UK adults saying they are familiar with ISAs, fewer than a third (29%) know the current adult ISA allowance is £20,000. This falls further for women to 26% and further still for young adults aged 18-34 (19%). 

“Furthermore, half (49%) of UK adults think the different versions of ISAs make them too complicated. Although Cash ISAs had some recognition, fewer than half of UK adults could recognise the other types.  

“Financial advisers have similar concerns. AJ Bell research shows the vast majority of financial advisers support ISA simplification. Two-thirds (65%) believed unnecessary complexity had crept into the ISA market, and 8 in 10 (77%) thought this was down to ‘too many variants and names’ for ISA products.” 

2. The impact on UK capital markets will be extremely limited

“While the aims of the British ISA – namely boosting UK capital markets and ultimately economic growth – are laudable, the policy simply will not achieve its stated purpose. The main ISA product already enables people to invest in UK companies in a tax efficient manner. Therefore, the only people who would have any need for a British ISA are those that regularly utilise all of their annual ISA allowance. Even if every person who subscribes £20,000 to a Stocks and Shares ISA were to open a British ISA and invest the full £5,000 allowance, it would generate a maximum of £4 billion a year for UK equities. In the context of a £2 trillion+ UK stock market, this is a drop in the ocean in relative terms.”

3. Behavioural shifts will further dampen any boost to UK Plc

“In reality, the impact will likely be much smaller. Not all investors who subscribe £20,000 a year to their ISA will use the product, and many investors who do will adjust their asset allocation in the rest of their portfolio to maintain the same overall UK exposure.”

4. The consumer harm risk

“The negative impact of extra complexity isn’t the only material consumer risk posed by the British ISA. Independent research commissioned by AJ Bell* shows that, when presented with the choice of a British ISA and a Stocks and Shares ISA for their first subscription of the tax year, more people chose the British ISA (35%) than the Stocks and Shares ISA (26%). Given investors could access a much wider range of investments in a Stocks and Shares ISA – allowing greater global diversification – choosing a British ISA for your first subscription would almost certainly be unwise. Under Consumer Duty, providers would therefore inevitably be required to deliver warnings to customers to mitigate the risk of foreseeable harm.”

*Based on a nationally representative survey of 2,000 UK adults carried out online on behalf of AJ Bell by Opinium between 7 and 10 May 2024.

5. How exactly would ‘UK’ be defined in a British ISA?

“To create a British ISA, government will have to decide what qualifies as a ‘UK’ investment. This should be relatively simple for direct equities on listed stock exchanges but becomes much more difficult for collective investment vehicles like funds and investment trusts. In the original consultation document, the government suggested the ‘Personal Equity Plan’ regime from the 1990s could be used, with only funds which invest at least 75% in UK holdings qualifying.

“If this model were adopted, there would need to be a mechanism in place to monitor allocations to UK companies/funds. Where an investment in a British ISA becomes non-qualifying, HMRC would need to decide on the approach taken in relation to that investment. If this monitoring process is overly onerous, product providers may simply decide any British ISA is not worth the hassle.

“Government will also need to make a decision in relation to the policy intent. If the aim of the British ISA is primarily to boost UK stock markets, such as the London Stock Exchange, then it may want to allow listed instruments, including Exchange Traded Funds (ETFs) and investment trusts, to qualify for British ISAs. However, many of these vehicles – and indeed many major listed businesses – have a limited stake in the UK. 

“The Scottish Mortgage Investment Trust, the largest investment trust on the market and a FTSE 100 member, holds just 3.2% in UK listed shares. Equally, Antofagasta, a London listed copper mining company, conducts most of its business in Chile. It is hard to make the case for including either of these companies in the British ISA while excluding the other.

“However, if investment trusts and UK equities on qualifying indices are deemed to qualify for a British ISA, one could make the argument that it would be unfair not to include similar investment funds that are not listed on an exchange. Given the challenges in identifying qualifying investments for a British ISA, it would be significantly simpler to increase the overall ISA allowance to £25,000, which would likely achieve very similar outcomes.” 

6. Should investors be allowed to transfer out of a British ISA?

“In an ideal world, if a British ISA is to be introduced, it would be slotted seamlessly into the existing ISA framework, with similar rules on subscriptions and transferability. However, the additional £5,000 overall annual subscription limit granted through the British ISA means allowing transfers out would leave the system open to being gamed.

“Savers could, for example, simply max out their British ISA subscription and then transfer their funds to a Stocks and Shares ISA, thus benefitting from a £25,000 overall subscription limit (rather than the usual £20,000 for a Stocks and Shares ISA), without ever having to expose a certain amount of their funds to UK investments.

“It is therefore hard to conceive of a situation where transfers out of a British ISA are allowed.”

7. Should investors be allowed to transfer into a British ISA?

“This creates a further challenge in relation to transfers into a British ISA. If transfers were allowed into British ISAs from other types of ISA but savers were barred from transferring out of the UK ISA world, there is potential for consumer detriment. For example, if an investor chose to transfer their entire Stocks and Shares ISA portfolio to a British ISA, they would effectively be locked into the British ISA. As consolidation is often a key reason for transferring existing ISAs, this is not an unrealistic scenario.

“Given exactly the same investments in a British ISA would already have been available to the investor in their Stocks and Shares ISA – not to mention a range of non-UK investments which could help them diversify their portfolio – this is unlikely to be a ‘good outcome’ and could potentially be viewed as ‘foreseeable harm’. Allowing transfers to British ISAs from other types of ISA would therefore risk undermining the FCA’s Consumer Duty.”

8. The cash conundrum

“Given the aim of the British ISA is to funnel investors towards UK-listed companies and funds, the government is understandably keen to discourage people using the vehicle to hold cash. Proposals put forward in the consultation include banning the payment of interest on cash or taxing cash interest payments.

“Having different rules regarding the payment of interest on cash for British ISA investors versus other ISA investors risks creating unnecessary complexity and undermining the core principles of the FCA’s Consumer Duty regulations. Regulated firms are also already required to give warnings to customers who hold large amounts of cash over a certain period of time.”

The FTSE 100 was firmly in the red on Tuesday as growth concerns started to creep in after several weaker uS data points.

Apart from earnings and geopolitics, the main drivers for equity markets tend to be economic growth and monetary policy. Over the past year, the focus has almost exclusively been on interest rates, and markets have given the growth outlook little consideration.

Indeed, US growth has been reasonably strong, so there has been little for investors to be concerned about while they wait for the Federal Reserve to cut rates. This may be about to change.

A string of US economic data points has reminded us that economic growth dictates company earnings, and if growth rates slow, the outlook for earnings may be impacted.

The risk of such a scenario hit equities and oil prices on Tuesday, and the FTSE 100 was trading down 0.3% at the time of writing.

“The FTSE 100 started Tuesday in negative territory amid signs of US economic weakness and mixed trading in Asia,” said AJ Bell investment director Russ Mould.

“Also not helping matters was a fall in oil prices, as OPEC’s surprise decision to start rolling back some of its production cuts before the end of the year hit the market. Index heavyweights BP and Shell, as well as other resources names, were on the back foot.

“News of slowing activity in US factories is a double-edged sword as it could provide the Federal Reserve with more room for manoeuvre on interest rates. Job openings data later today could reveal if a softening economy is being reflected in looser labour market conditions. Friday’s non-farm payrolls release is also in focus as investors await the latest decision from the Federal Reserve next week.”

The fixation on interest rates will likely continue in the short term, but investors will become increasingly concerned about growth if we receive further weak data later this week.

As Mould alluded to, commodity companies were among the worst hit on Tuesday with miners Anglo America, Antofagasta, Rio Tinto and Glencore down between 1.7% and 3.6%. A soggy Asian session weighed on Standard Chartered which fell 4%.

Ocado was the biggest faller, down 6.4%, as the high-beta stock accentuated the wider market move.

Defensive utilities companies and consumer staple stocks were the best performers as the risk-off move drove allocations to ‘safer’ stocks.

Hargreaves Lansdown has released investor buying activity for May, revealing its ISA account holders have waded into equities in a big way.

During May, HL ISA investors picked out broad equity indices for their portfolios, particularly those with a focus on US stocks providing exposure to the AI story and wider technology sector.

Top Funds bought in ISAs, May 2024 (net buys, HL clients)

“It’s a firmly ‘risk on’ mood for HL clients. Interest rates cuts have been kicked into the long summer grass, and the April market slump is in the rearview mirror, meaning ISA investors are filling their baskets with equity funds,” said Emma Wall, head of investment analysis and research, Hargreaves Lansdown

“Five of the top 10 most bought funds in ISA wrappers last month were global equity funds, with the remainder made up of US equity and tech trackers, an L&G European index fund and ISA stalwart Jupiter India, which has been a mainstay in the top 10 lists for the past six months.”

“This market optimism amongst HL clients is not surprising; the spectre of recession has passed and equity markets on both sides of the Atlantic rallied through the first half of May. The S&P 500 shrugged off April losses to hit yet another all-time high, while the FTSE 100 similarly recorded a new peak mid-month.”

While its great US and UK equities have hit record highs in recent months, the data from Hargreaves Lansdown’s client’s buying activity during the period should be treated with caution. Retail investors are notoriously bad at timing the market and are often guilty of chasing returns in fear of missing out.

It should be no surprise that HL’s retail client base bought up equity-based funds given the biases associated with individual investor activity. However, retail investors rushing into stocks at elevated levels has historically proved to be a sell signal for equities.

As the warning goes, when your taxi driver starts talking about stocks, it’s probably time to sell. This usually happens near a peak in stocks.

That’s not to say we’re anywhere near euphoria in stocks, but as Emma Wall points out, the rush into stocks by HL’s investors may mean many over look the opportunity to diversify portfolios into other asset classes that may offer better value than equities.

“While stickier-than-hoped inflation and higher-than-anticipated jobs data has meant interest rate cuts are no longer expected this month, it is better to be early when it comes to investing and now could be a great time to buy bonds,” Emma Wall said.

“Most portfolios would benefit from the diversification a fixed income fund brings to an equity portfolio, and over the long-term, bonds offer both income and growth opportunities.”

UK gilt and US treasury yields are trading near multi year highs and the potential capital gains on offer – should interest rates fall – are compelling.