The FTSE 100 slipped again on Monday after poor Chinese data hit London’s many China-leaning shares, including financials and miners.

The weight of declines from stocks such as Rio Tinto, Burberry, Antofagasta, and Prudential more than offset any positivity from a 20% jump in Rightmove after the property portal received a bid from Rupert Murdoch’s

“There’s no September spark for the FTSE 100, with the index trading flat and losing more ground early in the session,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“After a disappointingly lower close on Friday, the footsie remains elusively below its record highs, with mining stocks sinking lower amid China’s ongoing economic troubles.”

China released mixed manufacturing data over the weekend, which pointed to stuttering economic growth at a time when investors are growing increasingly nervous about the country failing to hit its 5% growth target.

Traditionally, the country has been seen as a beacon of hope for global growth, but this simply hasn’t been the case since the pandemic.

More worrying for investors, Chinese authorities seem to be happy to let the troubles with the property market and slowing manufacturing sector run their course.

Market participants have long been accustomed to intervention in the form of stimulus measures. However, the lack of interest by China in supporting its economy is becoming a major headwind for many sectors reliant on the country.

“The world’s second largest economy may be trying to wean itself off its reliance on export demand by stoking domestic consumption,” explained AJ Bell investment director, Russ Mould.

“But this is proving a tricky process and exports were down for the first time in eight months amid weak consumer demand outside of China. This chimes with recent poor numbers from Temu-owner PDD.”

Rightmove

Another high-quality London-listed company could be on the verge of being taken private by an overseas player who clearly sees more value in the company than the UK’s public markets are prepared to attribute it.

Rightmove shares soared on Monday following news that REA Group was considering a bid to acquire the company and add it to its portfolio of Australian property portals.

“The standout name on the FTSE 100’s risers list was Rightmove which moved around 20% higher after Australian group REA confirmed it was considering a takeover of the property portal,” Russ Mould said.

“This news breathed some life into the share price after a static period but don’t expect the company to be snapped up without a fight. Shareholders will be pushing for a generous deal and other potential bidders may throw their hat into the ring with rival proposals.”

Vertu Motors, which operates 192 car sales and aftersales outlets across the country, has released a trading update for the five-month period ending 31 July 2024, revealing a mixed performance across its various business segments.

The group’s used vehicle division has emerged as a bright spot, with like-for-like volume growth of 5.0% and an improved gross margin of 7.2%.

This strong performance is attributed to stable used vehicle values in the UK, underpinned by increasingly constrained supply. The robustness of the used car market is expected to contribute to an improved performance in the second half of the financial year.

In contrast, new retail vehicle sales volumes for the group declined by 5.8% during the period. However, this figure represents a significant outperformance of the broader UK market, which experienced a more substantial 12.1% decline as customers hold off on new vehicle purchases amid confusion around electric vehicle policies.

The new vehicle market has seen a shift towards the fleet channel, including Motability sales, which grew by 19.3% in the UK.

Aftersales operations have delivered a robust performance, with revenue and gross profit growth, as customers chose Vertu for services, not just sales.

Vertu Motors anticipates that its first-half profits will be lower than the previous year’s levels, as expected, and full-year FY25 adjusted profit before tax will be broadly in line with current market consensus.

Performance is expected to improve in the second half of the year.

”I am pleased with the Group’s performance against a fast-shifting market backdrop. Our high margin, resilient aftersales business continues to thrive aided by higher technician numbers and strong execution of the Group’s vehicle health check process,” said Robert Forrester, Chief Executive of Vertu Motors.

“The retail new car market remains weaker as the Government’s regulation to transition to battery electric vehicles causes market volatility and negative impacts. 

“The current dislocation in the market presents opportunities for Vertu Motors to capitalise on, assessed using strict investment return metrics, with our strong balance sheet providing financial flexibility, an excellent portfolio of strong brands, robust and scalable systems, and a strong and experienced leadership team with motivated colleagues.”

Rupert Murdoch’s REA Group is interested in bidding for Rightmove, the UK’s leading property portal.

In a move that would be a real kick in the teeth for London’s equity market and the British property landscape, Australian real estate media giant REA Group has announced it is considering a takeover bid for Rightmove.

REA Group, owned by Rupert Murdoch, has confirmed it is weighing up a possible cash and share offer for the entire issued and to-be-issued share capital of Rightmove. However, it notes that no formal discussions have taken place between the two companies, and REA Group has not yet approached Rightmove regarding any potential offer.

Nonetheless, Rightmove shares were over 23% higher in very early trade on Monday.

If Rightmove were to leave London’s stock market, it would follow in the footsteps of peer OnTheMarket, who accepted a £100m bid from US property information company CoStar in 2023.

Used by millions, Rightmove has built a deep moat and is one of the UK’s most widely visited websites and the leading property portal. Searching on Rightmove is synonymous with entering and moving up the UK property ladder.

REA Group views this potential merger as a transformational opportunity to create a global and diversified digital property company with market-leading positions in both Australia and the UK.

The potential takeover bid taps into the British public’s long-standing obsession with property. For decades, homeownership has been a cornerstone of British culture, with property often seen as both a home and an investment.

If London’s equity markets cannot support companies so deeply entrenched in the UK’s obsession with property by providing the right environment to fend off overseas bids, we are truly in dire straits.

REA Group believes that the enlarged group would represent an attractive investment opportunity for shareholders of both companies.

We will have to wait and see if Rightmove’s board and shareholders agree.

As per UK takeover rules, REA Group must announce a firm intention to make an offer or declare it does not intend to make an offer by 5.00 p.m. on 30 September 2024. This deadline may only be extended with the consent of the Takeover Panel.