Construction sees biggest rise for seven years amid housing boom

Liam Roche
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Construction sees biggest rise for seven years amid housing boom

IHS Markit’s Construction PMI reaches 64.2% in May, above economists’ expectations

The construction sector grew at its quickest rate in close to seven years last month as the easing of lockdown restrictions caused a surge in new orders.

The IHS Markit’s Construction Purchasing Managers’ Index expanded by 0.6% to 64.2% in May, reaching its highest point since September 2014.

It also surpassed economists’ expectations of 62.3. Any recording higher than 50 is a sign of growth.

Growth was particularly strong in housebuilding, as house prices soared by more than 10% during May on an annual basis.

Housebuilding was followed by commercial jobs which saw its strongest level of growth since August 2007.

“UK construction companies reported another month of rapidoutput growth amid a surge in residential work and the fastest rise in commercial building since August 2007,” Tim Moore, economics director at IHS Markit, said.

Pressure on costs also intensified for construction firms at the fastest pace since records began, following a jump in supplier delivery times.

“Despite severe challenges with materials availability, construction firms remain highly upbeat about their near-term growth prospect,” Moore said.

Additional data is showing that Britain is on a path for a strong rebound in growth. Other surveys for the manufacturing and services sectors are suggesting that the UK economy is now partaking in broad-based growth.

The all-sector PMI, a combination of the PMI surveys for construction, manufacturing and services, jumped by 2.2% in May, its highest ever recording.

Employment growth in the construction industry remains at its highest level since 2014, as demand for staff reached record highs in May.

On the other hand, Howard Archer, chief economic advisor to the EY ITEM Club, gave a warning about what the data could mean: “Stretched supply chains and rises in raw material prices led to input prices rising at the fastest rate in the survey’s history of just over 24 years.”

“This will undoubtedly add to mounting inflationary concerns.”

New car sales on the rise but remain 15% down on pre-pandemic levels

Liam Roche
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0
New car sales on the rise but remain 15% down on pre-pandemic levels

Hybrid earned nearly 13.8% of this year’s new car market

Demand for new cars fell by 14.7% in May compared to the same month in 2019.

The Society of Motor Manufacturers and Traders (SMMT) revealed that 156,737 cars were registered in the UK last month.

The figures show an increase of nearly 675% from May 2020 when showrooms were forced to shut down as the first lockdown came into effect.

Since the beginning of the year total registrations are still down by 29.1% compared to the average between 2010 and 2019.

SMMT chief executive Mike Hawes said: “With dealerships back open and a brighter, sunnier economic outlook, May’s registrations are as good as could reasonably be expected.

“Increased business confidence is driving the recovery, something that needs to be maintained and translated in private consumer demand as the economy emerges from pandemic support measures.

“Demand for electrified vehicles is helping encourage people into showrooms, but for these technologies to surpass their fossil-fuelled equivalents, a long-term strategy for market transition and infrastructure investment is required.”

Hybrid vehicles are making up ground, earning 13.8% of this year’s new car market, an increase of 6.6% from the same point a year ago.

“But for these technologies to surpass their fossil-fuelled equivalents a long-term strategy for market transition and infrastructure investment is required,” Hawes said.

James Fairclough, chief executive of AA Cars, told The Times: “The new car market has burst back into life and sales in May were up substantially on April’s figures as buyers once again flocked to showrooms across the UK. With lockdown restrictions set to be eased even further in late June many prospective buyers will be keen to choose a vehicle that will enable them to enjoy a summer staycation in the UK, or just to travel to see family and friends across the country.”

“It may take some time for sales of new cars to return to their pre-pandemic levels, as many drivers continue to be drawn primarily to the used market, which offers affordable price points and plenty of choice,” Fairclough added.

The battery electric vehicle market saw a fall from 12% last May to 8.4% in 2021.

Rio Tinto appoints first Aboriginal director after sacred cave destruction

Liam Roche
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0
Rio Tinto appoints first Aboriginal director after sacred cave destruction

Rio is striving to improve its perception across the world after it blew up the Juukan George rock in Western Australia last year

Rio Tinto, the FTSE 100 mining group, has appointed its first ever indigenous Australian to its board as it deals with the aftermath of its destruction of a nearly 50,000-year-old sacred site in 2020.

The iron ore-focused miner said on Friday that Ben Wyatt, the former Australian minister of Aboriginal Affairs, would bring about expertise in public policy, regulation and trade upon joining the company on the first day of September.

“I was deeply saddened and disappointed by the events at Juukan Gorge but I am convinced that Rio Tinto is committed to changing its approach to cultural heritage issues and restoring its reputation,” Wyatt said.

Rio is striving to improve its perception across the world after it blew up the Juukan George rock in Western Australia last year, leading to investors and board members to variously express their disapproval.

Rio Tinto’s chairman Simon Thompson said: “With family links to the Pilbara and an impressive track record in public life, Ben’s knowledge of public policy, finance, international trade and Indigenous affairs will significantly add to the depth of knowledge on the board at a time when we are seeking to strengthen relationships with key stakeholders in Australia and around the world.”

Approximately 90% of the mining company’s profits come from its iron ore production in the Pilbara.

Prior to entering state parliament in 2006, Wyatt has worked as a solicitor and a barrister.

The Rio Tinto share price (LON:RIO) moved sideways on Friday and is currently valued at 6,166.00p.

Foxtons to expand outside of London

Liam Roche
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0
Foxtons to expand outside of London

Foxtons’ focus on London is now holding the group back

Foxtons (LON:FOXT), the London-based estate agent, has announced its new strategy as it looks to gain from the property sales boom.

The firm told its investors on Thursday that it intended to expand beyond the London market, by targeting sales across the south-east, in addition to other UK cities.

Foxtons is also targeting the build-to-rent sector. It is doing this by buying small lettings companies, including the purchase of competitor Douglas & Gordon for £14.25m.

While it once provided the group with an edge, Foxtons’ focus on London is now holding the group back.

Over the past ten years, house prices have taken a hit and sales have slowed in the capital, specifically in the more expensive areas where Foxtons operates.

Since 2014, the Foxtons share price has tumbled from just under 400p to just below 60p, its level today.

The Financial Times reported that Catalist, an activist investor which owns 2% of the company, believes the estate agent has “lost its way”.

Catalist added that Foxtons had been outperformed by competitors in London, and that it had stalled over the past five years.

However, the analyst reckons Foxtons could become a £1bn company if it expands outside of London. At present, the estate agent’s market cap is around 20% of that level.

In a show of optimism, Foxtons said it expects to deliver H2 profits ahead of its levels before the pandemic on rising demand in London.

European markets anticipate non-farm payroll report

Liam Roche
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0
European markets anticipate non-farm payroll report

The FTSE 100, like other markets across Europe, is in a noncommittal mood ahead of the announcement of the non-farm payroll figures later today.

The FTSE 100 continued to bob around the 7,055, falling 0.14%, while the DAX edged to a fresh all-time high of 15,675, and the CAC lurked at 6,500.

“The futures are suggesting much the same for the US open, with the Dow Jones set to start Friday’s trading unchanged around the 34,600 mark,” said Connor Campbell, financial analyst at Spreadex.

It could be argued that nothing much changes until the latest non-farm data is released.

“Last month was a shocker, with the headline nonfarm figure coming in at just 266,000 against the near-1 million forecast. Yet it was a result that investors weren’t exactly unhappy with, given it may cause the Federal Reserve to reconsider any stimulus tapering talk,” Campbell said.

“For May, however, signs are pointing to a rebound. The ADP non-farm reading on Thursday shot past expectations, rising from 654,000 to 978,000, while jobless claims have been steady falling week-on-week, yesterday striking a pandemic-low of 385,000.”

Analysts’ estimates have the nonfarm number climbing to 645,000, with the unemployment rate falling from 6.1% to 5.9%. Average hourly earnings are, as ever, the one outlier, with expectations of 0.2% against the previous month’s 0.7%.

“Considering that nonfarm forecast lies somewhere between the levels expected last month, and the number produced last month, it will be interesting to see how investors react. It might hit that sweet spot – strong enough to point to a continuing recovery, but not strong enough to prompt any action from the Fed,” Campbell said.

FTSE 100 Top Movers

Johnson Matthey (1.42%), B&M (1.04%) and Royal Mail (0.97%) are the top movers on the FTSE 100 on Friday having made modest gains.

At the bottom end during the morning session is Rolls-Royce (-2.77%), Bunzl (-2.21%) and Sage Group (-1.63%).

Musk ‘trolling’ stops bitcoin recovery in its tracks

Liam Roche
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0
Musk ‘trolling’ stops bitcoin recovery in its tracks

Bitcoin is own by 5% as Musk hints at possible breakup

Bitcoin is down by 5% on Friday as Elon Musk took to Twitter again, appearing to hint at a ‘breakup’ with the cryptocurrency through his tweets.

https://twitter.com/elonmusk/status/1400620080090730501

Musk, along with Tesla’s, and his own substantial holdings of bitcoin, is able to put the market on a knife edge whenever he takes to the social media website.

Musk has previously stated that Tesla was not willing to sell its bitcoin, however his tweets are enough to make the market nervous as it is still reeling in shock from a torrid May.

“He’s trolling the community,” Bobby Ong, co-founder of crypto data aggregator and analytics website CoinGecko, told Reuters.

Friday’s dip means that the cryptocurrency, at $36,697.21, is below its 20-day moving average.

Musk has previously been an ardent supporter of bitcoin, but more recently turned against it over concerns around its energy usage.

Since Tesla announced its $1.5bn purchase of bitcoin, its stock has fallen by one third.

Since its record peak at nearly $65,000, bitcoin is down by more than 40%.

Bitcoin is constantly on the minds of investing-minded millennials as the cryptocurrency is viewed as a way of creating wealth. 

It could even be that millennials’ interest in bitcoin is what paves the way for an eventual mass adoption. 

Data collected by Crypto Parrot, the cryptocurrency trading simulator, shows that millennials aged between 25-35 lead the way in the bitcoin community with an engagement rate of 41.51%. 

Those aged between 35 and 44 years old are the second-highest group with an engagement rate of 20.16%.

Airline shares dive as Portugal is taken off the green list

Liam Roche
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0
Airline shares dive as Portugal is taken off the green list

Traveling to Portugal will now require a ten-day home quarantine return

Shares in major travel companies plummeted yesterday as the UK government removed Portugal from its green list of safe destinations.

The decision caused chaos among holidaymakers, many of whom rushed to cancel their trips abroad.

Tui saw its share price fall by 4.5% yesterday, while the easyJet share price was down by over 5%.

Ryanair and IAG, owner of British Airways, also saw sizeable losses, down 4.5% and 5.4% respectively.

The government’s decision to change Portugal’s status to amber means those traveling will have to do a ten-day home quarantine on their return.

Chief executive of the Business Travel Association, Clive Wratten, told The Times that the government’s ruling effectively meant the UK had essentially closed its border. “It is a devastating day for the travel industry as a whole. Removing Portugal from the green list will destroy any confidence in international travel, whether for work or leisure.”

The possibility of travelling to Portugal throughout the summer gave hope to airlines and travellers alike in an otherwise dreary summer season.

John Foster, director of policy at the CBI, said: “The UK mustn’t jeopardise the strides made through the vaccine programme, but the international travel sector is on its knees and unable to trade its way to recovery. Without a successful summer season, the government will need to consider further sector-specific support to save jobs and skills essential for future growth.”

It is thought that the UK has been in talks, albeit slow paced, aimed at establishing a travel corridor between the nations.

The traffic light system was first put into place on May 17 when international leisure travel resumed. Now that Portugal is being removed from the green list, only 11 countries will remain.

There has been speculation that new countries could be added to the green list, including Malta and Finland, but the government is remaining cautious.

New AIM admission: Arecor Therapeutics

Andrew Hore
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0
New AIM admission: Arecor Therapeutics

Arecor Therapeutics takes existing pharma products and reformulates them for new uses or to make them more effective. This reduces the risk, compared with developing completely new drugs.
Arecor has secured partnerships for some products, but the insulin products for diabetes are being developed to the phase II clinical trial stage and then a partner will be sought.
Any of these products could address significant markets so if one becomes a commercial product, particularly an insulin product, that could help to underpin the valuation of the company. The diabetes insulin products are still goin...

New Aquis admission: Pioneer Media Holdings Inc

Andrew Hore
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0
New Aquis admission: Pioneer Media Holdings Inc

Pioneer Media Holdings Inc is a Canada-based investment company with investments in eSports and mobile gaming businesses. It already has a portfolio of ten companies and a Canadian Stock Exchange listing.
The opening price was 47.5p and it has edged up to 48p. That values the company at £18.7m. Net assets were $12.7m at the end of February 2021 and more cash has been raised since then. It is difficult to assess the movements in all the share prices and currencies, but it seems safe to say that Pioneer Media is trading at a premium, probably significant, to NAV.
There have been two trades on Aq...

Lloyds share price awaits dividend announcement

Liam Roche
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0
Lloyds share price awaits dividend announcement

Lloyds Share Price

Having touched 50p this month the Lloyds share price (LON:LLOY) looks to be on the way up. Despite retreating today by over 1% to 49.35p, its price at the time of writing. Over the past six months the Lloyds share price is up by 25.7%. Over a longer period of a year, it has risen by 45%, in what appears to bee a sustained recovery from the pandemic-induced downturn. The question now is can Lloyds continue to make ground on its pre-pandemic level of 56p. Its H1 update in July could go some way to deciding the trajectory of the Lloyds share price for the remainder of 2021.

Dividends

Historically, Lloyds shares are popular, even when the share price is down, as they pay out a significant dividend. Investors will be on the look out for further announcements on this matter in the near future.

Lloyds, in April, said its intention was to resume a sustainable dividend policy. Analysts have even predicted a dividend yield this year of around 5.6%.

The next update on the matter can be expected to arrive when Lloyds announces its dividend policy in its H1 results in July. Between now and then, other factors could determine the Lloyds share price, such as the vaccine roll-out and broader economic issues. Although a month isn’t a long time in investing.

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