FTSE shrugs off sell-off in US and Asia

Liam Roche
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FTSE shrugs off sell-off in US and Asia

The FTSE 100 was off to a solid start on Wednesday morning, up by 0.72% at the time of writing at 7,078.80.

“If investing is often about climbing a wall of worry, then market participants arguably face the equivalent of the Matterhorn right now but on Wednesday investors seemed to be undaunted,” says AJ Bell investment director.

This is despite a big sell-off in Asia and the US overnight, with tech stocks leading the way down.

“The global energy crisis is really just the latest manifestation of a wider shortage of stuff as demand has flooded back in the wake of the pandemic,” Mould adds.

Then you have specific pressure points like the crisis around Chinese property developer Evergrande and the latest in what feels like a series of periodic battles over the debt ceiling in the US.

“Against this uncertain backdrop central banks are having to weigh up inflation risks which, like chewing gum on the sole of a shoe, are proving stickier than they’d hoped.”

To counter the threat posed by rising prices they face the prospect of dialling down economic support at a time of mounting uncertainty over the recovery.

FTSE 100 Top Movers

Next (3.04%), Ferguson (2.42%) and Segro (2.4%) are leading the way on the FTSE 100 on Wednesday morning.

Royal Mail (-5.4%), Admiral and Smith (-2.04%) and Nephew (-1.5%), have not fared so well so far, as the trailing three companies on the UK index.

Next increases full-year outlook as profits surge to £347m

Liam Roche
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0
Next increases full-year outlook as profits surge to £347m

Next also warned against stock levels due to supply chain issues

Next has raised its forecast again, as the retail outlet thinks its fill-year profit could reach its highest point since 2016, having seen its trading levels “materially exceed expectations” during H1.

The clothes seller anticipates its profit before tax for 2021 will rise to £800m, the highest point in five years.

Since its shops re-opened in April, Next says its sales have surpassed expectations, while online deals have fallen back somewhat.

“The positive sales trend has continued through August into the second half, despite significant stock shortages caused by Covid-19 disruption to international supply chains,” Next said.

Although Next did warn that ongoing supply chain issues meant that its stock levels were not optimal, which means its sales are vulnerable.

Next chief executive Lord Wolfson said the retail bounce-back from the coronavirus pandemic was “far stronger than we anticipated”. 

“Sales in retail stores have done better than planned, while online sales have fallen back less than we expected. It appears that the wider economy has not suffered the long term damage many feared, for the moment at least. And, in particular, employment has held up well,” he added.

The Next share price is up by 2.75% during the morning session on Wednesday.

“Next is a best-in-class UK retailer so if even it is struggling to navigate staffing and supply chain issues then you know its peers will be really under the pump,” says Russ Mould, investment director at AJ Bell.

“The company is also very upfront with its guidance, so you know you are getting an unfiltered version of events.”

“Trading may have been better than expected in recent months, supporting an increase in full year guidance, but the company is clear on the risks it faces heading into the key Christmas trading period,” says Mould.

Mastercard to offer buy now, pay later feature

Liam Roche
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1
Mastercard to offer buy now, pay later feature

Mastercard joins competitors Monzo and Revolut

Mastercard is set to implement the “buy now, pay later” feature on its cards as it becomes the biggest player to now do so.

The service will allow people to pay via interest-free instalments, across the UK, US and Australia.

Mastercard’s move is only the latest as a number of company’s are exploring new versions of credited.

Other firms to do so include Revolut and Monzo, while Apple are said to be exploring an offering in that area.

Craig Vosburg, Mastercard’s chief product officer, said that Mastercard Installments was “a digital-focused way to pay today and tomorrow, delivered through consumers’ most trusted relationships with their banks and other lenders, at merchants of their choice”.

Critics are of the view that it is not neccessarily a good thing for customers as they are likely to take on more debt.

Castillo Copper has option to secure two prime lithium projects

Liam Roche
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0
Castillo Copper has option to secure two prime lithium projects

Projects located in Australia and Zambia

Castillo Copper (LON:CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, announced on Wednesday that it has entered into a 90-day option agreement to acquire – subject to due successful due diligence – two granted, highly prospective lithium projects.

The Litchfield and Picasso Lithium Projects are located in prime regions in the Northern Territory (NT) and Western Australia (WA) respectively.

Castillo confirmed it has the option for 90-days to acquire – subject to successful due diligence – two highly prospective lithium projects in prime locations:

  • Litchfield Lithium Project (Northern Territory) is contiguous to Core Lithium’s (ASX:CXO) strategic Finniss Lithium Project which has JORC compliant ore reserves (7.4Mt @ 1.3% Li2O), with production slated to commence in H2 20221
  • Picasso Lithium Project (Norseman region, WA) is proximal to Liontown’s Resources’ (ASX: LTR) Buldania Project, with a JORC compliant resource at 14.9Mt @ 0.97% Li2O3, and has mapped pegmatites4 that potentially host lithium mineralisation

Simon Paull, Managing Director of Castillo Copper, commented: “This is a strategic acquisition to complement our existing copper assets and strengthen Castillo’s exposure to critical metals for the clean energy transition. We consider the projects to be highly prospective and they are situated in prime locations nearby to proven Lithium reserves.”

“By focusing on developing copper and lithium projects, the Board is positioning Castillo to potentially create significant incremental value from the transition towards renewable energy sources and accelerating demand for electric vehicles globally.”

The Castillo Copper share price is down by 0.56% during the morning session on Wednesday.

New AIM admission: GreenRoc Mining’s battery-powered prospects

Andrew Hore
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0
New AIM admission: GreenRoc Mining’s battery-powered prospects

GreenRoc Mining has acquired the Greenland-based mining assets of Alba Mineral Resources (LON: AMR) in return for shares that provide the AIM-quoted mining company with a majority stake.
The Amitsoq graphite project will take the eye of many investors. This has graphite suitable for using in the manufacture of lithium-ion batteries and demand will increase as more electric vehicles are produced.
The project that may commence production first, though, is Thule Black Sands, which has ilmenite. This project is near to AIM-quoted Bluejay Mining’s Dundas mineral sands project.  
GreenRoc raise...

Tip update: Transense progressing to profit

Andrew Hore
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0
Tip update: Transense progressing to profit

Strong growth in royalty revenues for the iTrack technology is helping Transense Technologies (LON: TRT) to finance additional investment in developing Surface Acoustic Wave (SAW) technology and products.
In the year to June 2021, revenues increased from £603,000 to £1.77m – iTrack generated £832,000, which is all profit. The launch of a new version of the Translogik tread depth, pressure and temperature probe boosted revenues from £510,000 to £764,000. The SAW business does generate revenues but its loss offsets the profit from the other activities.
The switch to royalty revenues for iTrack e...

Private rental prices could remain high for UK tenants

Liam Roche
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0
Private rental prices could remain high for UK tenants

Research carried out by LandlordBuyers.com shows that rental prices in the UK have risen by 10.6% since 2015.

UK house prices are rising and there is a record-breaking number of aspiring homeowners
registering with estate agencies, as the rental market also remains busy as ever.

Private rental prices in the UK rose by 1.2% in the last 12 months.

When divided regionally, private rental prices grew by 1.1% in England, 1.5% in Wales and 1.2% in Scotland over the past year.

London was the only region which saw an annual decrease in private rental prices (of negative 0.1%).

The figures are raising questions over the sustainability of rental prices.

LandlordBuyers.com Managing Director, Jason Harris-Cohen, said:

“Rental prices will always rise where there are more tenants than available properties and in our experience, the UK rental market is continuing to see strong demand at present.”

“Despite a pandemic, moving activity in the UK rental market has remained buoyant – and perhaps you could say rental demand is at such high levels because of the pandemic, with people moving for re-evaluated lifestyles and working practices. The statistics suggest that even as a semblance of normal life resumes, we will keep the same pace in the private rental sector. We expect rents to keep rising, although incrementally, and voids to stay low.”

“Rents are slightly too high at present but this is simply a byproduct of the supply and demand situation in the UK. Research from Propertymark revealed 68% of agents said they saw landlords increase rents in June 2021, compared to 60% in March 2021 Additionally, when looking at the year-on-year statistics, this figure has more than doubled since April 2019. If more lets become available, however, we may start to see rents fall,” said Harris-Cohen.

Crypto firm Molde releases results after ‘transformational year’

Liam Roche
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1
Crypto firm Molde releases results after ‘transformational year’

Molde’s Bitcoin under management grew by 327%

Mode Global Holdings (LON:MODE), the fintech company, on Tuesday confirmed its unaudited results for the six months ended 30 June 2021.

Mode leverages Bitcoin and Open Banking to deliver on its mission, offering people a one-stop
app for growing wealth and spending smarter, as well as providing businesses with a cheaper,
safer and smarter alternative to card payments and boosting loyalty amongst customers.

The crypto firm moved into a gross profit margin of 19% following a H1 2020 gross loss, while its balance sheet had £5.7m cash and liquid assets of £8.3m (FY 2020: £6.2m).

Revenues increased more than twenty-fold to £0.8m (H1 2020: £0.03m) reflecting 3,200% growth in trading volumes and increased payment volumes of Global Services.

Its Bitcoin under management grew by 327%.

Mode successfully completed of a materially oversubscribed placing to raise £6m to support the continued growth of its financial ecosystem.

Ryan Moore, Mode CEO, said: “Our half-year results mark a significant milestone for Mode. 2021 has been a transformational year and, after a successful period of investing in our people and products, we are now moving at pace. We have successfully built a strong platform of regulated and innovative products to drive growth. I continue to be impressed by our team at Mode and their ability to deliver a disruptive financial ecosystem where exchanging value can be seamless for all.”

Low Carbon Innovation Fund 2 invests in Outfield Technologies

Liam Roche
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0
Low Carbon Innovation Fund 2 invests in Outfield Technologies

The investment in Outfield Technologies is part of a £576,000 round that also includes Cambridge Agritech and Amadeus.

Turquoise, the UK merchant bank specialising in energy, environment and efficiency, has announced its 12th deal for the Low Carbon Innovation Fund 2 (LCIF2).

Outfield provides a yield measurement and orchard management system for high value fruit crops.

Its growers on four continents are deploying inexpensive, off-the-shelf, drone systems to quickly survey orchards and gather high resolution images.

Outfield then uses machine learning to analyse this imagery, providing detailed maps of tree condition and fruit loading to help growers visualise and track the parameters in their orchards, informing precision management to increase yields, and sales forecasts to prime the supply chain.

Axel de Mégille, director at Turquoise, commented: “Outfield technology will enable growers to improve yields on their production as well as decrease CO2 emissions associated with the use of chemical fertilisers.  We were impressed by what the Outfield team has built so far and are proud to be part of the next step of their journey.”  

Jim McDougall, Co-Founder of Outfield added: “We are delighted to welcome LCIF2 as an investor in Outfield. This investment will enable us to develop the customer base as well as adding new functionalities to the platform. LCIF2 will also enable us to strengthen our links with local and national government.” 

LCIF2 is funded by European Regional Development Fund, with the UK Ministry of Housing, Communities and Local Government as the Managing Authority. 

FTSE 100 dips despite oil reaching $80 a barrel

Liam Roche
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0
FTSE 100 dips despite oil reaching $80 a barrel

The FTSE 100 is down by 0.37% on Tuesday to 7,039 as the price of oil soared.

“Brent Crude smashed through the $80 per barrel level as the energy crisis worsened. While energy shortages are likely to have a negative impact on economic growth, strength in the oil price was good news for Royal Dutch Shell and BP,” says Russ Mould, investment director at AJ Bell.

Shell and BP are among the biggest constituents of the FTSE 100 and so their share price performance has considering weighting on the direction of the overall index.

“Their stocks advanced by approximately 2% on Tuesday, making them the top performers after Smiths Group which jumped 3.6% on an update regarding the sale of its medical division,” said Mould.

Despite Shell and BP moving up, it wasn’t enough to lift the FTSE 100 overall as the index was fighting negative movements from miners, pharmaceuticals and financials.

“A firm takeover offer has finally come for robotic process automation group Blue Prism and it’s less than the market anticipated, leading to a near-3% drop in the share price. A bid battle cannot be ruled out as the company admits it has received multiple proposals in recent months and, as we’ve seen with many other takeovers this year, once the first bid is made then other interested parties start to up their game.”

“While considerable investment is required in the business, a would-be suitor taking a long-term view of the sector’s growth prospects might see Blue Prism as a cheaper way to get a foot in the door, given how its US-listed rivals have historically traded on much higher ratings,” says Mould.

FTSE 100 Top Movers

Smiths Group (2.58%), Shell (2.2%) and BP (1.98%) make up the top three during the morning session on Tuesday.

At the other end, Sage Group (-4.33%), Intermediate Capital Group (-3.24%) and Segro (-3.26%), are the bottom three on the FTSE 100.

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