Residential transactions down 63% in July as stamp duty holiday comes to an end

Liam Roche
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Residential transactions down 63% in July as stamp duty holiday comes to an end

Property transactions are still up year-on-year

Residential property transactions during July were 62.8% lower than the month before, and 4.2% higher than July last year.

That is according to figures revealed today by HMRC.

The fall follows a surge in June, which saw transactions more than double on a year-by-year basis.

While the property market may not be reaching the heights of the past few months, transactions remain up year-on-year.

Sam Mitchell, CEO of online estate agent Strike, said: “People may be questioning how the property market will cope now that the stamp duty holiday is winding down, but demand is still far greater than prior to the pandemic. Smaller properties below the £250,000 stamp duty holiday limit are partly driving this, and there’s also the ongoing trend of homeowners looking for more space and opting for regional locations over city commuter belts. Especially now that many companies are making it clear that hybrid working is here to stay.”

“And let’s not forget that other incentives are still at play to make it easier for people to access the market, like the increased availability of 95% mortgages and the seemingly never-ending low interest rates. And who knows, the government may have something else hidden up their sleeve to introduce once the stamp duty holiday tapering off period ends in September,” Mitchell added.

FTSE 100 struggling for direction with Jackson Hole in sight

Liam Roche
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FTSE 100 struggling for direction with Jackson Hole in sight

The FTSE 100 is down by 0.13% during the morning session on Tuesday as the UK index appears to be struggling for direction.

“The FTSE 100 was heading nowhere fast on Tuesday, starved of any obvious catalysts on the corporate and economic front” says AJ Bell financial analyst Danni Hewson.

Travel and hospitality stocks helped boost the FTSE 100 as concerns over Covid appeared to subside temporarily.

“Concerns about the spread of the Delta variant seem to wax and wane as often as the weather and a slightly sunnier mood to match the meteorological conditions in the UK helped the travel sector eke out some modest gains early on,” said Hewson.

Also helping sentiment was a steady performance overnight for Asian stocks and a strong showing on Wall Street.

“All eyes remain on the Jackson Hole meeting at the end of the week with the markets likely ferreting around for clues on what central bankers will do next on financial stimulus and interest rates and, crucially, when.”

FTSE 100 Top Movers

Whitbread (2.5%), IAG (2.44%) and Flutter Entertainment (2.23%) are leading the way on the FTSE 100 during the morning session on Tuesday.

Trailing the pack of 100 are Sainsbury’s (-1.82%), Avast (-1.61%) and HSBC (-1.37%).

McDonald’s out of milkshakes across all UK restaurants

Liam Roche
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McDonald’s out of milkshakes across all UK restaurants

According retail trade bodies there is a shortfall of 90,000 HGV lorry drivers

McDonald’s is running out of milkshakes in all of its 1,250 restaurants across the UK as the fast-food company feels the impact of supply chain issues.

In addition to milkshakes, McDonalds has also run out of bottled drinks at a number of its locations.

“Like most retailers, we are currently experiencing some supply chain issues, impacting the availability of a small number of products,” the company said.

“Bottled drinks and milkshakes are temporarily unavailable in restaurants across England, Scotland and Wales.”

It is not the first firm to impacted by supply issues which could have been caused by a shortage of lorry drivers due to EU immigration rules and Covid restrictions.

Groups lobbying on behalf of the retail and transport industries have contacted Kwasi Kwarteng, the business secretary, to warn of the shortage of lorry drivers and the potential impact on supply chains.

They have suggested reviewing the possibility of granting temporary work visas to driver from the EU.

According to Logistics and other retail trade bodies, there is a shortfall of as many as 90,000 HGV lorry drivers.

Oil prices rise on approval of vaccine by US regulator

Liam Roche
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Oil prices rise on approval of vaccine by US regulator

The price of Brent crude oil is up by 0.7% to $69.26 per barrel

Oil prices are up on Tuesday as investors’ hopes of a recovery in demand for fuel were boosted following the US’s drug regulator approving the Pfizer Covid-19 vaccine.

The price of Brent crude oil is up by 0.7% to $69.26 per barrel at 0859 GMT today, while US West Texas Intermediate (WTI) had gained 0.66% to $65.94.

Both benchmarks were aided by a weakening US dollar, having seen their biggest losses in over nine months a week ago.

The US Food and Drug Administration (FDA), which towards the end of 2020 authorised the Pfizer/BioNtech two-dose vaccine for emergency use, has now issued full approval for use by those aged 16 or older.

Officials are hoping the approval will encourage unvaccinated Americans to take the jab, as well as encouraging state and local governments to bring vaccine mandates into action.

“With many corporations and government agencies likely to enforce vaccine mandates, return to office travel should dramatically pick up in the fall,” Edward Moya, senior analyst at OANDA, told Reuters.

Drilling underway at Greatland Gold’s Scallywag Licence

Liam Roche
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Drilling underway at Greatland Gold’s Scallywag Licence

Greatland Gold (LON:GGP) confirmed on Monday that drilling has commenced at its 100% owned Scallywag licence, the latest campaign in the firm’s 2021 multifaceted exploration programme in the Paterson province of Western Australia.

After receiving regulatory permits the AIM-listed firm commenced testing of multiple new targets at Scallywag following analysis of results of a Heliborne Electromagnetic (“EM”) survey conducted last year and further geological interpretation of regional aeromagnetic and gravity datasets.

Exploration work at Scallywag is focussed on the discovery of large-scale intrusion related gold-copper deposits such as Havieron, Telfer and Winu.

 Multiple conductors were identified following a detailed analysis of Heliborne EM including:

  • Swan – a strong Airborne EM conductor located in an interpreted fold structure with coincident gravity anomaly developed adjacent to, or truncated by, a crustal scale fault.
  • A34, A35 and A36 – discrete segments of strongly conductive material coincident with a positive gravity response.

Shaun Day, Chief Executive Officer of Greatland Gold plc, commented: “We are excited to have commenced our drilling campaign at Scallywag, which is focused on a number of high-priority targets in ground adjacent to Havieron. These targets have been selected due to their compelling geological characteristics borne out across multiple datasets and analysis, particularly the EM survey conducted last year.”

“As a 100% owned asset, Scallywag presents an opportunity to deploy our proven expertise and potentially deliver further exploration upside for our shareholders.”

The Greatland Gold share price is up by 4.12% during the morning session on Monday.

Indian equity wrap: economic optimism continues to support rally

UK Investor Magazine
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Indian equity wrap: economic optimism continues to support rally

Market sentiment remained positive throughout the week and ended on Friday with a gap-up opening of Nifty 50 with the levels of the Nifty and Sensex trading around all time highs.

Economic News

Nirmala Sitharaman (Finance Minister of India) assured the public that the government is committed to work and perform. All the initiatives for boosting the economic growth in India will be taken. 

Despite the heavy cases and closed economy, FDI or foreign direct investments has been flowing to India at an increasing rate. Indian market shows confidence over the stocks and rebounded buying is created in the market. 

CRISIL – a credit rating agency, increased the value and Inc’s credit of India’s quality outlook. It is assumed that the sentiment of the market is positive till FY-22. With the increasing amount of vaccination in India, the impact of the virus is slowly decreasing. This led the agency to portray a futuristic positive picture with improvement for the Indian market. 

The finance Cabinet in India has approved a fund of Rs.11,400 crore for the edible palm oil setup. This crucial decision has been initiated to reduce the dependence on edible oils. A price assurance has been given to the farmers producing palm oil in India.

On Friday, the government announced the reduction of subsidies for exporting sugar. The Sugar mills of India who currently export sugar, will be given an incentive to divert sugar to ethanol. A monthly quota will be proceeded to set for the sale of sugar in the Indian market.

Week’s Biggest Market Moves

Tata Steel and Bajaj Finance have been the top gainers during the week’s commencement. On Monday, the rise in metal prices and the doubling of the same within a year boosted the share price of Tata Steel. With the increase in metal prices, the company is generating higher revenue from steel metal products. Tata Steel has moved from the price of 1480 to reach its higher levels at 1500 in the mid-week, whereas a straight profit booking session has been observed on 20thAugust with the price settled at 1367. 

Bajaj Finance is the most active and traded stock in the Indian markets. Financial services are at a high level in the Indian market and executing a silent growth. The company’s lookout is strong from its liability side and capability to extend digitization. Bajaj finance moved from the price of 6137 to 6637 through the week. 

Other stocks: Apollo Hospitals and Fortis Healthcare brought positive results with all-time high profits. Thus, an increase in share price. A sharp spike has been seen in the stock- Shyam Metallics and Piramal enterprise remained on day’s high. 

Tremendous growth has been seen in the IT sector stocks on 17thAugust which led to stocks like, Tech Mahindra, Infosys. Wipro and TCS trade at their highest. A minimum of 1-3% change has been observed in the IT stocks. What’s the reason behind the rolling of all the IT stocks in a single day?

Well, India’s IT sector is prominently inducing digitization and growing with improved work structure. Major IT companies allowed their employees to work from home for an extended year. Interestingly, it is bringing a faster pace of work and valuation for the company. In the IT sector, Work from home attracting increased use of the cloud and internet. The rally has been brought up by the Top-tier tech companies of India that are scoring high on the credit scores. These scores are provided by Crisil which is the reason behind a spike in the IT shares. 

Other stocks: Maruti, L&T and Reliance Industries were the major stocks to gain in the Sensex. Glenmark Pharmaceuticals increased with the news of its good profits at 254 crores.

On Wednesday, the stocks traded with a smaller and high-low range in the Indian market. The market sentiment remained low throughout the day. HDFC Bank, Reliance, and ICICI Bank remained the focus for the indices to show positive gains. 

Other stock: Ultratech Cement has been the top gainer with 3% up on the day whereas, Tech Mahindra – top loser with 1% down. 

Indian markets were remained shut on Moharram on 19thAugust 2021. Due to the one-day off, a gap-up negative opening was observed in the market. The SGX-Nifty traded on the Singapore exchange signalled a negative opening earlier on Friday morning. 

On Friday, the FMCG sector is responsible for holding the market into positivity. The stocks like HUL, Marico, Dabur, Nestle, Godrej consumers remained the focus in the Indian stock market. 

NIFTY FMCG index gained around 0.87% in the retail rally on Friday. HUL was up by 3.66%, Nestle was up by 1% & Godrej was up by 2.26%. 

The reason behind the FMCG rally is the setting up of funds for palm oil production in India. The decision has relieved the FMCG companies from the extra import duty in future.  

Another reason for HUL to rise day’s high is Pizza hut is in news to have tied up with the company to add Quality walls ice cream in their menu. This reason led to an increase in orders from the franchise Pizza company leading its stock price higher.

Darktrace shares price to rally again following sell-off?

Liam Roche
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Darktrace shares price to rally again following sell-off?

Darktrace Share Price

Darktrace (LON:DARK), the British-American cybersecurity company, has dipped for the fourth consecutive week, down 16.33% over the past month. The move downwards comes on the back of what has been a a successful run since the company’s IPO in April. Following Darktrace’s London listing, its share price surged by 90p within hours. On the 30 July it reached as high as 765p before coming back down to its level at the time of writing of 579p. While Darktrace’s opening months on the stock market demonstrated investors’ confidence in the cybersecurity firm, the recent dip could serve as an ideal moment to buy. One factor that is creating optimism around the Darktrace share price is the continued growth of the cybersecurity industry.

Why did the share price fall?

A small group of investors in Darkface offloaded shares worth close to £150m earlier this month, taking profits from its bull-run following its flotation.

KKR, the American private equity giant, Hoxton Ventures and Balderton Capital found buyers for 23.15m shares, which caused the Darktrace share price to dive. According to The Times, 1.8m shares in the cybersecurity firm are traded in each session.

Cybersecurity

Cybersecurity is becoming more important within the global economy, albeit for some concerning reasons. The ability to keep information secure is increasingly important and there is plenty of money to be made if a company is able to do so.

Just under 40% of businesses in the UK have been the victim of a cyber attack over the past year, with 21% of that figure having reported losing data, money or assets.

In 2020, losses due to cybercrime came to $1trn, per McAfee, the anti-virus manufacturer, while the cybersecurity market could be worth as much as $400bn by 2027.

The demand for Darktrace’s services are there, and if the company can become a world leader, then its shareholders could become very wealthy.

Private equity interest highlights value in UK equity markets

Liam Roche
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Private equity interest highlights value in UK equity markets

The first half of 2021 has seen the highest number of private equity deals in the UK in five years. With Morrisons and Ultra Electronics both deep in negotiations, while Sainsbury’s is rumoured to be next-up for a takeover approach, it appears as though this trend is here to stay.

Last week Morrisons’ board accepted a £7bn takeover offer by Clayton Dubilier & Rice as the private equity company outbid its rival with a 285p per share offer. The FTSE 100 company’s board changed its mind having initially supported Fortress’ bid.

Back in July Morrisons had turned down an offer of £5.5bn from Clayton Dubilier & Rice suggesting it was significantly under market value.

Additionally, after the government requested an investigation to be carried out into the proposed £2.6bn takeover of Ultra Electronics by American private equity firm Cobham, the deal looks likely to go through.

Warning that foreign investment “must not threaten national security”, Kwasi Kwarteng, the business minister, put forward an order in parliament preventing Ultra from disclosing “sensitive information” to Cobham, the company behind the takeover bid.

While private equity companies earn shareholders the chance of getting a premium price in the immediate-term, the deals can remove the potential for longer-term growth, particularly for UK investors.

Why the UK?

A host of UK stocks have been on the receiving end of bids this year, particularly from American private equity firms, in a sign of the current value in the UK equity market.

The UK is being targeted because it is very cheap according to Ian Lance, Portfolio Manager of Temple Bar Investment Trust – “it is at the biggest discount to the MSCI World for fifty years”.

The FTSE 100 index has added 8.24% so far this year, and is being outperformed by the S&P 500, up 20.02% year-to-date, as well as the DAX, which is up 15.50%.

Additionally, Lance feels that the UK, compared to other nations, is quite friendly to takeovers from a regulatory point of view.

Ed Wielechowski, Manager of Odyssean Investment Trust, said: “Whilst we do not believe UK listed companies as a whole are undervalued, there are pockets of above average quality companies which are trading at below their intrinsic values. Fundamentally, this drives bid activity.”

Private equity firms are also flush with cash and able to swoop in on these opportunities due to the fact they are able to borrow money very cheaply.

EV charging platform Bonnet receives $1.3m funding for business expansion

Liam Roche
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EV charging platform Bonnet receives $1.3m funding for business expansion

Bonnet is a tech platform for electric vehicle chargepoints

Bonnet, the electric vehicle charging platform, has received a total of £920,000 ($1.3m) in funding to expand its business in what is a crucial year for reaching net-zero targets.

£850,000 came from an equity financing round led by Ascension Ventures with investors from Imperial College London and APX, while an additional £70,000 came from Innnovate UK and OZEV.

Bonnet, the EV charging platform simplifying payments, was launched in October 2019 by co-founders Patrick Reich and Eliot Makabu.

The app gives drivers real-time data on charger availability and functionality – drawn from multiple sources – and offers drivers lower-cost charging that they can use anyway across the network, rolling over what they don’t use into the next month.

The funding will support the expansion of the ten-strong team at Bonnet as well as growing the platform’s chargepoint offering and partnerships with network operators.

Since its launch, Bonnet has aggregated charging points in 1,400 locations across the UK and aims to have integrated with 70% UK chargepoints by the end of 2021.

The company is also introducing semi-public and private charging points for app users, paving the way for domestic chargepoint owners to monetise too, as part of a semi-public network.

Commenting on the funding, co-founder and CEO Patrick Reich says:

“We’re honoured to have been awarded this funding round for Bonnet which will propel our offering nationwide. Since we launched in October 2019, we’ve seen a real acceleration in the growth of our platform. In the past six months alone, we’ve partnered with the likes of ESB, Shell Recharge, EVBox, Alfa Power, Franklin Energy, Plug-N-Go, Allego, Fastened and char.gy to provide cheaper and simpler public charging for customers.”

“Our goal is to take the anxiety out of charging electric vehicles and believe the process should be far more democratic and accessible – particularly for drivers in urban areas who need on-demand, affordable public chargepoint access. By expanding our offering this year, Bonnet can become the top resource for drivers looking for reliable real-time chargepoint data and simple EV payments: we’re committed to ensuring EV drivers never overpay again.”

FTSE 100 lifted by gains in Asia on Monday

Liam Roche
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FTSE 100 lifted by gains in Asia on Monday

The FTSE 100 started this week in decent shape, up 0.38% at the time of writing, after Asian stocks managed to squeeze out some gains overnight.

“M&A remains in focus amid weekend reports of a private equity bid for Sainsbury’s, begging the question will there be any companies left at the end of this corporate raiding exercise?” said Dannie Hewson, financial analyst at AJ Bell.

“The takeover chatter helps underling appeal of the UK supermarket sector to overseas bidders, following the battle for Morrisons, but further transactions could raise questions about having such key components of the country’s food security in the hands of overseas private equity firms.”

Bitcoin continues its recent rally, climbing above the $50,000 mark it last reached in May though still some way short of its $65,000 all-time-high as PayPal announced plans to launch its cryptocurrency trading platform in the UK.

“Earlier in the summer speculation that Amazon might be about to step up its involvement in bitcoin off the back of a key hire also gave it a boost,” according to Hewson.

FTSE 100 Top Movers

Sainsbury’s is well ahead of the pack following rumours over a potential private equity bid (11.7%), followed by Burberry (3.27%) and Prudential (3.13%).

At the other end of the FTSE 100 during the morning session on Monday is BT Group (-2.71%), Hikma Pharmaceuticals (-1.82%) and United Utilities Group (-1.52%).

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