FTSE 100 pauses to catch a breath

Liam Roche
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FTSE 100 pauses to catch a breath

Following a strong showing on Wednesday the FTSE 100 is more reserved today, up by 0.10% to 7,005 during the morning session.

“The FTSE 100 was pausing for breath on Thursday having done its best to pick itself off the canvas after being felled by Covid and inflation concerns at the start of the week,” says AJ Bell investment director Russ Mould.

With the European Central Bank meeting taking place later today, the market could be given some direction as inflationary pressures will likely be high on the agenda.

US weekly jobless figures will also be closely monitored later given “US central bankers have long signaled that the jobs market is pretty much their lodestar” when it comes to making decisions on monetary policy, according to Mould.

“Part of the narrative behind the market rebound in the last couple of days has been the idea that support for economies might be sustained for longer as the world stares down the barrel of rising Covid infections linked to the Delta variant,” Mould said.

FTSE 100 Top Movers

IAG (3.9%), Flutter Entertainment (3.82%) and 3i Group (3.57%) have each made solid gains this morning as the week draws to a close.

At the bottom end of the FTSE 100 on Thursday morning is Unilever (-4.53%), Persimmon (-3.25%) and Reckitt Benckiser (-2.29%).

Greatland Gold reports ‘excellent’ growth drilling results

Liam Roche
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Greatland Gold reports ‘excellent’ growth drilling results

Greatland Gold says results from Growth Drilling continue to support the potential for resource expansion

Greatland Gold (AIM:GGP) reported continued ‘excellent’ growth drilling results at its Havieron gold-copper project in the Paterson region of Western Australia.

The AIM-listed company said drilling activities since the last update include new results from the Growth Drilling programme, which continue to support the potential for resource expansion of the Havieron gold-copper project.

The latest results involve seven new drill holes with each one intersecting significant mineralisation.

Newcrest Mining (ASX:NCM), its partner in the project, has completed a total of 184,081 metres of drilling from 212 holes so far.

Growth Drilling continues to confirm extensions to the high grade South East Crescent and the Northern Breccia mineralisation below and around the initial Inferred Mineral Resource estimate, the company said. HAD138 (Northern Breccia) reported 84.5m @ 2.0 g/t Au & 0.05 % Cu from 683m, including 12.7m @ 6.0 g/t Au & 0.01 % Cu from 685.3m.

Additionally, 2021 Growth Drilling is progressing into full-year 2022. A further 15 Growth drill holes have been completed with samples awaiting assay, anticipated to be received and reported in the next update.

Shaun Day, Chief Executive Officer of Greatland Gold plc, commented: “There is a tremendous amount of activity and excitement with the progress across the Havieron gold-copper project. In addition to the intensity of the drilling programme, the decline development is now maintaining 24- hour operations and the surface support infrastructure is nearing completion.”

“The drilling programme keeps on delivering with every hole continuing to hit significant mineralisation while also growing the scale of the Project. Drilling has identified several exciting results from the South East Crescent, extending the high grade mineralisation beneath the initial Inferred Resource estimate.”

“The ongoing success from each set of drill results builds confidence in the world class nature of the Havieron gold-copper project and its potential to expand. This de-risks the project as we progress it towards potential production and adds further upside to the value of the deposit.”

“With 15 intersections awaiting assay, the volume of information available is expected to significantly expand with our next update as we continue to grow our understanding and scale of the Havieron gold-copper project.”

The Greatland Gold share price is down by 2.27% during the morning session on Thursday.

Cost pressures weigh on Unilever’s margin guidance

Liam Roche
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Cost pressures weigh on Unilever’s margin guidance

Unilever’s underlying sales rose by 5% during the quarter ending in June

Unilever surpassed its expectations on Thursday with its Q2 sales growth which was helped by rising prices and its sales of ice-cream and teas.

However, the soaring price of commodities could narrow its operating margin at the end of the year.

This was reflected by investors this morning as the Unilever share price dropped by 4.34% in early trading.

The FTSE 100 company’s underlying sales rose by 5% during the quarter ending in June, 0.2% above analysts expectations.

Having previously expected an increase, Unilever is now expecting its operating profit margins to be flat for 2021.

Chris Beckett, head of equity research at Quilter Cheviot, gave further context to the news:

“Unilever’s sales growth matched market expectations, while earnings growth exceeded market expectations due to low tax and interest payments. Underlying sales grew 5% in the quarter with slowing volumes (+3%) being supported by accelerated pricing (+2%),” said Beckett.

“All product categories broadly matched market expectations with the strongest growth being recorded in Foods & Refreshment which benefited from increased European ice cream sales. Asian and emerging markets were top performing regions for Unilever, led by double digit performance in China and South Asia.”

“Of concern, however, is the reduction in operating margins and lowering of the full year margin guidance as a result of cost increases. These result from higher input costs across the supply chain affecting a number of product lines. Operating margins should now only be maintained – whereas Unilever previously expected a slight improvement.”

UK Treasury reveals plan to sell-off more NatWest shares

Liam Roche
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UK Treasury reveals plan to sell-off more NatWest shares

NatWest chairman says London office culture will never be the same

The UK Treasury is set to sell more of its stake in NatWest over the coming 12 months as it confirmed a trading plan to decrease its holding in the bank.

NatWest was rescued by the government on the back of the financial crisis over ten years ago. It remans 54.7% owned by the UK Treasury despite continued efforts to sell-off its holding.

However, the government reaffirmed that it would only sell the shares for a price it deems fair for taxpayers.

Its sales of NatWest shares have up until now represented a hefty loss on what was paid for them in the aftermath of the financial crisis.

The NatWest share price was valued below 200p as markets closed on Wednesday, meaning the FTSE 100 bank has a valuation of £23bn.

The latest trading plan has been permitted by chancellor Rishi Sunak on the advice of UKGI.

“The implementation of a trading plan represents continued progress towards the government’s plan to return this shareholding, acquired as a result of the 2007-2008 financial crisis, to private ownership,” the Treasury said.

Additionally, the chairman of NatWest, Howard Davies, said office culture in London is unlikely to ever be the same as it was before the pandemic.

Davies said that he expects the changes to remain even once the pandemic is a thing of the past: “The days when 2,500 people walked in through our office door on Bishopsgate at 8:30 and then walked out again at 6 o’clock, I think that is gone. I suspect there won’t be that many people who will be doing five long days in the office.”

While some of the company’s workers, especially traders, will continue to operate from company desks, most of the bank’s staff will be required to enter the workplace on an intermittent basis. “I suspect there won’t be many doing five long days in the office,” Davies said.

Morrisons shareholders will vote on Fortress offer in August

Liam Roche
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0
Morrisons shareholders will vote on Fortress offer in August

The offer on the table by Fortress stands at 254p per share

Morrisons (LON:MRW) confirmed on Thursday that its shareholders will be able to vote on the proposed £6.3bn takeover from a consortium led by Fortress Investment Group on August 16.

A court meeting and a general meeting will be held on August 16, it was revealed by a scheme document outlining Fortress’ offer.

While the supermarket group’s directors are recommending acceptance, the offer remains subject to approval by shareholders.

The offer on the table by Fortress stands at 254p per share. 252p is in cash plus a 2p share dividend.

The special dividend would be paid two weeks after the takeover is completed.

“Discussions are continuing with the trustees to agree appropriate mitigation and the trustees have stated their intention to issue their opinion on the Fortress Offer in due course,” Morrisons said.

Back in June, Morrisons rejected an offer of £5.5bn from a different consortium, adding that it was an undervaluation of the company.

The business consists of just under 500 stores and over 110,000 employees across the UK.

In addition to Fortress’ offer, which has been deemed acceptable, the investor promised to support the supermarket’s exit strategy, keep its head office in Bradford and protect employees’ pension rights.

Morrisons first existed as a market stall in Bradford in 1899 owned by William Morrison. His son then took over the company and opened the first supermarket in the 1960s.

During the morning session on Monday, the Morrisons share price is pretty much unchanged.

New AIM admission: Microlise Group

Andrew Hore
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New AIM admission: Microlise Group

Microlise Group is a SaaS-based transport management technology company that has more than 400 customers with over 500,000 vehicles using its software. Although hardware is supplied, it is the software that provides the long-term cash generative ability of the company.
One of the most impressive things is that the churn rate is around 1%. The software focus probably helps but it is an indication that the software is well thought of by the end customers and it is useful to them. Signing customers up on multiyear deals also helps.
Cash generation outstrips revenues because many of the customers ...

Hurricane Energy share price rises as Crystal Amber increases holding above 25%

Liam Roche
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0
Hurricane Energy share price rises as Crystal Amber increases holding above 25%

Hurricane Energy Share Price

The Hurricane Energy share price (LON:HUR) jumped by 16.01% on Wednesday following news that Crystal Amber, the activist fund, raised its holding in the oil company above 25%. At the beginning of July, UK Investor Magazine reported that Crystal Amber had raised its stake by nearly 9% to 23.09%. At that point the Hurricane Energy share price climbed as high as 4.09p per share. However, it has somewhat retreated before today’s surge, which brought the company’s stock value to 3.26p per share. With high levels of debt and a failed financial restructuring, the Hurricane Energy share price appeared to be in a precarious position, however investors will be hoping today’s news provides a sustained boost.

Crystal Amber

It appears that investors are happy about Crystal Amber’s latest signal of intent as the investor increased its control over Hurricane Energy. Some key changes have already been made to the business by Crystal Amber, which could serve to influence the performance of the Hurricane Energy share price over the coming months. Firstly, it successfully ousted two non-executive directors, replacing them with Crystal Amber’s nominees, John Wright and David Craik. They also stopped Hurricane Energy in its efforts to implement a financial restructuring that could have wiped out its shareholders.

Ongoing Issues

Hurricane Energy’s troubles stem from the downgrade of the company’s reserves at its Lancaster oil field, which poses a significant threat to the company’s future as its output estimates plummeted dramatically. The AIM-listed company is weighing up proposals to drill new wells to boost output at the Lancaster oil field. However, its hands are tied somewhat due to its obligation to pay back a £163m convertible bond in a year’s time.

Crystal Amber’s job, now that it has a 25% holding, is to overcome these obstacles to secure the oil company’s future. Investors with an interest in the Hurricane Energy share price will be keeping a close eye on Crystal Amber’s strategy going forward.

European stocks performing well despite China’s efforts to undermine commodity prices

Liam Roche
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0
European stocks performing well despite China’s efforts to undermine commodity prices

Stoxx Europe 600 up by more than 1% on Wednesday

A strong start to the week for American companies fed through to European stocks on Tuesday, as the FTSE 100 is up by 1.64%, closing in on the 7,000 marker.

The Stoxx Europe 600, an index of European stocks, also rose by more than 1%.

“That comes despite Chinese efforts to undermine prices in key commodities, with the government laying out plans to auction reserves of zinc, aluminium, and copper,” Joshua Mahony, Senior Market Analyst at IG.

Following a delayed reaction from investors, reopening stocks seem to be back in favour, including travel companies and airlines.

98% of all Covid-19 cases in the UK are the Delta variant and the future economic outlook could depend on its effect on people going forward.

“There are concerns that those countries without high vaccination levels will be unable to cope without heavy restrictions, while the UK provides the blueprint for reopening efforts in the face of huge numbers of Covid cases,” said Mahony.

Commodity prices are under pressure, according to Mahony, in the wake of a Chinese announcement that they will auction reserves of copper, aluminium, and zinc in a bid to quell price pressures.

China intends to sell 170,000 tonnes of non-ferrous metals in another round of auctions, according to an announcement by state media, Xinhua, on Wednesday.

China will auction 30,000 tonnes of copper, 90,000 tonnes of aluminium, and 50,000 tonnes of zinc from state reserves in late July, Xinhua reported.

“The rise in Chinese PPI highlights how input costs are driving up inflation, and bulls will hope that this alleviates some of the underlying reasons behind the recent rise in headline CPI,” commented Mahony.

“Recent months have been dominated by the Chinese efforts to calm the price of key commodities, and today’s announcement represents an intensification of those efforts.”

“Nonetheless, with market in risk-on mode, there is a clear willingness to overlook short-term volatility in commodity prices to instead focus on the prospect of economic outperformance in the second half of 2021.”

Bitcoin price climbs above £23,000 ahead of ₿ Word Conference

Liam Roche
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1
Bitcoin price climbs above £23,000 ahead of ₿ Word Conference

Bitcoin Price

The price of bitcoin is up by 6.17% over the past 24 hours, moving above £23,000.

The jump comes ahead of Elon Musk’s appearance at the “The ₿ Word” event, alongside Jack Dorsey of Square and Twitter, and Cathie Wood of ARK Invest.

A week ago the bitcoin price was approaching £26,000, and spent most of the week above £24,000, before crashing to below £22,000 by early Tuesday morning.

EU Regulation

The slide came as regulators across the world began to call for tighter checks on the crypto industry.

Other cryptocurrencies, including ether, saw similar dips as European regulators put forward plans to ensure crypto becomes more traceable due to concerns it has over money-laundering.

The law set out by the European Commission would apply a ‘travel rule’ to transactions in order to make them more traceable.

The rule already applies to wire transfers and has been recommended by the Financial Action Task Force (FATF).

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing,” the Commission said in a statement.

₿ Word Conference

Following a Twitter exchange between Jack Dorsey and Elon Musk, a sit-down conversation between the pair, with the addition of Cathie Wood, the superstar investor, will take place on Wednesday 21 July.

It is drawing a lot of attention due to Elon Musk’s previous outspoken comments about bitcoin and his apparent ability to influence its price.

The live discussion event is scheduled to take place at 5pm GMT.

UBS launches ‘Carmen’ portfolio to invest in women-run hedge funds

Liam Roche
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0
UBS launches ‘Carmen’ portfolio to invest in women-run hedge funds

Figures show that women make up 10.9% of senior employees at hedge funds

UBS has launched a portfolio that only invests in hedge funds headed up by women.

The move is a part of the Swiss investment bank’s wider efforts to focus on diversity and identify untapped potential within the industry.

UBS’s launch of the ‘Carmen’ portfolio came after an initial trial phase, the Financial Times reported.

The funds will select 10-15 funds across the world where a woman has sole or joint discretion over the investment decision making.

However, UBS is not the first to make such a move. Last year Aberdeen Standard Investments launched a fun that monitors the performance of an index of hedge funds run by women.

Carmen will be actively managed, making use of quantitative and other analysis to find funds to invest in.

Women in Hedge Funds

Interest in women-led hedge funds is growing, as large investment companies seek to ensure their investments meet the criteria of environmental, social and governance (ESG) credentials.

Hedge funds are one of the worst performing asset classes for female representation, at 18.6%. This is according to data revealed by Preqin, as reported in the Financial Times.

Figures show that women make up 10.9% of senior employees at hedge funds, up slightly from the year before.

Claire Tucker, senior investment officer at UBS’s hedge funds unit, told the Financial Times that women were “under-represented, particularly on the investment side, despite a lack of evidence justifying that by skill or performance differences”.

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