Chip maker EnSilica has been awarded a major contract to supply a custom sensor ASIC for the rapidly growing e-mobility market. The deal, worth over $7 million across the first five years, will see EnSilica design and manufacture a mixed signal sensor chip for electric vehicles, e-bikes, e-scooters and other electrified transport.

With the non-recurring engineering costs fully funded by the client, EnSilica expects to complete the majority of design work this financial year, before commencing volume production in mid-2025.

The contract signals EnSilica’s entry into the high-growth e-mobility space, projected to reach $325 billion by 2030. With innovation driving demand for differentiated products, EnSilica’s ASIC capabilities position it strongly to capitalise on custom chip opportunities across electrified transport.

Ian Lankshear, Chief Executive Officer of EnSilica plc, commented:

“We are pleased to announce this new supply contract in a key growth market undergoing significant innovation and adoption globally. The technological demands across the e-mobility market are similar to those of the automotive market, and we look forward to capitalising on our proven automotive expertise to further expand our market reach.”

The FTSE 100’s UK banks and housebuilders were among the top risers on Wednesday morning despite the UK economy contracting faster than expected in July.

UK GDP contracted 0.5% in July, more than the 0.2% consensus of economist estimates. The dismal reading has been blamed on the timing of the coronation, poor weather and a slowdown in construction.

Regardless of the reasons behind the drop, a 0.5% contraction should be a cause for concern.

“Today’s GDP data reflects a sluggishness surrounding the UK economy. While a technical recession remains at arm’s length, the challenging economic environment persists,” said John Glencross, CEO and Co-Founder of Calculus.

Nonetheless, the FTSE 100’s UK-focused housebuilders and banks rose on the news in early trade on Wednesday. A contracting UK economy is far from supportive of these companies’ earnings.

However, such a poor report of UK economic activity will have a major influence on the Bank of England’s next rate decision. Although wages are soaring according to data released yesterday, slowing economic activity will help to slow inflation and provide the BoE with an opportunity to pause rate hikes.

Lower rates will please investors in homebuilders struggling in the face of higher mortgage rates. This will then feed through banks and their mortgage lending activity.

This is the upside scenario. The downside scenario is persistent contraction, recession, and an even worse housing market than we have already.

Belluscura delivered a promising helf year report on Wednesday which set the scene for strong future growth.

Belluscura has been in its development phase with the launch of new products and the most interesting part of their results is the post-period orders for their portable oxygen units.

The company has inked a ‘transformational’ deal with InnoMax who will have an exclusive license for Belluscura’s technology in China, Hong Kong, Macau and Singapore. The deal is valued at $55m in minimum royalties over the term of the license.

Belluscura has also received orders for over 6,500 DISCOV-R worth around $15m.

“I am very pleased with the substantial progress the Group has made this period,” said Bob Rauker, Chief Executive Officer Belluscura.

“The signing of new distribution agreements, the strong reception and orders for DISCOV-R, the continuing progression of X-PLOR and the signing of the significant licensing agreement with Innomax sets a strong foundation for great progress next year and beyond.

“The Portable Oxygen Concentrator Market is predicted¹ to grow at a compound annual growth rate (“CAGR”) of 14.0% from $1.63 billion in 2022 to $2.76 billion by 2026, making this is a very exciting time for Belluscura’s category leading products.”

There was slight disappointed with revenue falling to $0.4m for the six months ended 30 June 2023, from $0.6m in the same period.

However, this was before the company inked the landmark agreement with their Chinese partners and won 6,500 DISCOV-R orders.

“We believe the signing of the groundbreaking Exclusive License and Royalty Generating Agreement with InnoMax, an affiliate of the world’s leading electronics manufacturing company, will be transformational for the Group,” said Adam Reynolds, Chairman of Belluscura.

BP CEO Bernard Looney has resigned with immediate effect after admitting he failed to disclose relationships with staff.

The CEO job is to be filled by CFO Murray Auchincloss on an interim basis until a long-term replacement is found. 53 year-old Bernard Looney has been leading BP for less than four years after starting as an engineer at the oil major in 1991.

Despite Looney’s long tenure, he was shown no quarter for risking bringing the British institution into disrepute.

“BP is one of the biggest players in British business, missteps of this magnitude aren’t what investors expect from one of the country’s most influential C-suites. Strong governance and conduct controls are rightly non-negotiables, and the emergence of a second round of allegations relating to Looney’s improper disclosure of relationships has proved a bridge too far,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“BP is now in a position where a permanent replacement needs to be found. A clear path forward needs to be forged sooner rather than later to limit negative sentiment. This of course all lands at a time when oil majors are already grappling to boost their ESG credentials, which adds weight to the problem. Looney has spearheaded an aggressive and green-thinking strategy during his tenure, and replacing him with someone that can convince the market they’re up for carrying the mantle and sprinting with it, isn’t going to be an overnight task.”

BP investors will not be pleased with the development as the company contends with mixed energy prices and increasing pressure to meet net-zero targets.

“The recent oil price spike only provides a limited cushion under BP’s valuation, with longer-term forecasters far more concerned about strategy and how well-prepared BP is for the energy transition,” Lund-Yates said.

After a rally yesterday spearheaded by the FTSE 100’s cyclical stocks, it was the defensive sectors turn to take the index higher on Tuesday.

Telecoms, pharmaceuticals and the recently unloved UK retail sector helped the index higher by 0.4% as of 14.10.

AB Foods was the standout performer on Tuesday as investors digested strong food sales and robust like-for-like sales across Primark’s outlets. AB Foods shares were over 6% higher at the time of writing.

The mining stocks at the forefront of Monday’s rally were among the worst performers. Housebuilders fell as investors learned of soaring UK wage growth which threatens further rate hikes by the Bank of England.

Smurfit Kappa was the FTSE 100’s top faller after announcing they would merge with WestRock, creating packaging giant Smurfit WestRock. Investors were not impressed with the terms and shares sank 8%.

US CPI

All eyes will be on tomorrow’s US CPI print and whether US inflation has further its trend to the downside.

“Investors are expected to stay largely treading water on Wall Street rather than taking any ambitious strokes ahead of the key consumer inflation reading,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Although Fed policymakers are expected to sit on their hands and keep interest rates on hold this month, the forecast for another hike ahead is uncertain. Sentiment keeps oscillating with expectations of another rate rise in November decreasing a little, with policymakers thought to be more nervous about doing too much and pushing the economy into a deeper slowdown.”

Expect fireworks tomorrow at 13.30 if CPI is materially out of line with the 3.6% consensus.