House prices a record high following extension of stamp duty holiday

Liam Roche
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House prices a record high following extension of stamp duty holiday

House prices rose by 1.1% in March

House prices increased at the fast rate in half a year in March following the chancellor’s decision to extend the stamp duty holiday, according to the Halifax house price index.

Property values rose by 1.1% last month, the largest increase in six months, and up from zero growth in February.

The average price of a home in the UK is now at £254,606, a record high.

The results of the survey provide an indication that the housing market in the UK is building momentum again following a mini slow-down in the lead up to the initial stamp duty holiday deadline in March.

Just over a month ago the chancellor Rishi Sunak pledged to “stand behind home buyers”, extending the stamp duty holiday to June. The budget also included assurance that the government will guarantee mortgages up to 95% of a home’s value.

Russell Galley, the managing director at Halifax, said: “The continuation of government support measures has been key in boosting confidence in the housing market. The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route on to the property ladder.”

According to Royal Institute of Chartered Surveyors (RICS), the strongest momentum registered in the northwest, Yorkshire and the Humber, and Northern Ireland.

Jeremy Leaf, a former chairman at RICS , said: “The number of buyer enquiries, sales agreed and transactions were boosted by the stamp duty extension after lockdown and the conveyancing backlog prompted a market pause. Faster rollout of the vaccine too has helped to encourage more appraisals and instructions but not at a fast enough rate to head off further upward pressure on prices in the traditionally busier spring market.”

Biden retains robust stance on China by adding tech companies to black list

Liam Roche
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Biden retains robust stance on China by adding tech companies to black list

There was widespread expectation, and concern on the part of the Republican Party, that Joe Biden would be soft on China during his presidency. However, the US President has been more hawkish than many anticipated.

As tensions between the US and China continue to play out under the Biden administration, investors with exposure to Chinese stocks could have cause for concern. Since taking up his position in the Oval Office earlier in the year, the president described China as an assertive competitor to the open international system and has subsequently blacklisted stocks deemed to be a security risk.

On Thursday the Commerce Department added seven Chinese supercomputing organisations to a blacklist because of national security fears. Among the entities added to the list were: Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi and the National Supercomputing Center Zhengzhou.

The seven entities were placed on the blacklist because they built supercomputers used by Chinese military actors, engaged in destabilising military modernisation efforts, and/or weapons of mass destruction programmes, according to the US government.

It is an accusation that has long been waged against China, which totally denies it is conducting these form of industrial espionage.

“Supercomputing capabilities are vital for the development of many – perhaps almost all – modern weapons and national security systems, such as nuclear weapons and hypersonic weapons,” U.S. Secretary of Commerce Gina Raimondo wrote in a statement.

“The Department of Commerce will use the full extent of its authorities to prevent China from leveraging U.S. technologies to support these destabilizing military modernization efforts,” she added.

Towards the end of his tenure, Donald Trump signed a law stating that foreign companies will not be listed on a US exchange if they do not cooperate with audits for three consecutive years from the US Public Accounting Oversight Board.

According to records on the boards website, there were 300 examples where inspections were denied. The vast majority were by Chinese companies, including Alibaba and Baidu, that are listed in America.

However, despite the growing tensions, and America’s forceful approach, 30 companies based in China were listed on the US stock exchange in 2020.

musicMagpie heads for AIM

Andrew Hore
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musicMagpie heads for AIM

Mobile phone and technology recycler and reseller musicMagpie could have an enterprise value of between £180m and £220m when it joins AIM in late April.
The company buys and resells smartphones, computers, CDs, DVDs, books and other products that might have ended up in landfill.
The market for pre-owned technology and media is estimated to be growing at 10% a year. Consumers appear to be more accepting of owning used technology products and musicMagpie already has strong market positions in the UK (as musicMagpie) and in the US (as Decluttr) so it is well placed to take advantage of this growt...

Asiamet Resources receives upgrade following process change at BKM

Liam Roche
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Asiamet Resources receives upgrade following process change at BKM

Asiamet given a buy recommendation with a price target of 8.9p per share from Optiva

Asiamet Resources (LON:ARS) could be set to gain from a change at the BKM copper project to a concentrate tank operation from heap leach.

That is according to broker Optiva.

Asiamet said in March that it would soon begin a thorough review of the flowsheet for the new process at the deposit in Kalimantan.

Altering the processing method could enhance copper findings by 40% or more through substantially faster production rates of copper cathode, Optiva has said.

In addition, production could be maintained at 25,000t per year for the full eight years of the mine’s initial lifespan, extending the life of the mine before the conversion of resources from existing reserves.

Optiva heaped further praise on the Asiamet board which brought an end to the Indokal Limited SPA and secured further funds to consolidate the AIM-listed company’s balance sheet.

Optiva gave a buy recommendation with a price target of 8.9p per share.

FTSE and pound drift lower despite fresh all-time highs on Wall Street

Liam Roche
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0
FTSE and pound drift lower despite fresh all-time highs on Wall Street

The FTSE 100 closed at a 13-month high yesterday – its best price since just before the UK’s first lockdown – before following up on Friday by falling 0.36% to 6,917.21. While it is “not enough to properly endanger its recent rise”, it is “still a knock to any momentum the index had been building this week”, said Connor Campbell, financial analyst at Spreadex.

“What makes the FTSE’s minor dip more interesting was that it came alongside another slip from sterling, which was down 0.3% against the dollar and 0.1% against the euro,” Campbell added.

In the same way that concerns over vaccines and a third wave impacted the pound this week, concerns may now be spreading to the blue-chip index. “This in light of the WHO’s warning on Thursday that it is the lockdown measures in place since Christmas, and not the vaccine rollout, that has supressed covid-19 cases in the UK – a worry given the recent easing, and daily case numbers that, whilst falling, still number in the thousands,” said Campbell.

The tone was similarly muted in the Eurozone. The DAX remained the wrong side of 15,200 as it fell 0.2%, with the CAC flat a few points short of 6,170.

The Dow Jones, on the other hand, is looking to add 50 or so points this afternoon, an increase that would lift it to 33,550, and put it back in all-time high territory.

FTSE 100 Top Movers

Spirax-Sarco Engineering (2.34%), Compass Group (1.87%) and JD Sports (1.82%) are the top risers on early morning trading as the week draws to a close.

British American Tobacco (-2.48%), BAE Systems (-2.41%) and Glencore (-1.94%) are the bottom end of the FTSE 100 so far on Friday.

Boohoo secures new UK warehouse deal

Liam Roche
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Boohoo secures new UK warehouse deal

Boohoo (LON:BOO), the online fashion brand, confirmed on Friday that it has signed a long-term lease for a warehouse in Daventry in a move that will improve its storage capacity.

The deal will bring 500 new jobs when the new warehouse opens for business, which could rise by a further 1,000 jobs as things develop.

The site, formerly belonging to Arcadia, will provide net sales capacity in excess of £4 billion, according to the fast-fashion brand.

The news comes as Boohoo strives to improve its public perception by improving its standards across its supply chains. This is following the firm facing backlash last year over how much the group paid its staff and poor working conditions.

The AIM-listed firm also said the new warehouse is scalable and as such it is expecting to invest in excess of £50m of the coming years to further increase its capacity.

The warehouse will start being used in Q2 of the current financial year which began on March 1.

Johnson Matthey considers selling £2bn health arm

Liam Roche
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Johnson Matthey considers selling £2bn health arm

Johnson Matthey conducting a ‘strategic review’ ahead of possible sale

Johnson Matthey (LON:JMAT), the speciality chemicals and sustainable technologies company, announced on Friday that it is considering offloading its health division, as the firm seeks to focus on other areas of the business.

The FTSE 100 company confirmed that it will be conducting a “strategic review” of the health arm, which chief executive Robert MacLeod says will be aimed at maximising value for shareholders.

“We have commenced a strategic review of Health, as we continue to focus resources to maximise value for our shareholders. As the world builds back greener following the pandemic, we have an important role to play in helping society address climate change through our sustainable technologies, and we remain focused on commercialising these and delivering our growth ambitions,” said McLeod.

Johnson Matthey’s health business is said to be valued at £2bn.

The firm will post its results of the financial year in May and is expecting them to meet the top end of their expectations.

Forecasts for Johnson Matthey’s underlying profit are at £469m, which would be a fall in the same figure from a year before, however that is down in large part to disruptions caused by the pandemic.

Robert McLeod made further comments on the company’s performance throughout the year:

“In what has been an extraordinary year, I would like to thank all of our employees for their dedication and efforts throughout this time. I am very pleased with the progress we made, particularly in the second half. As a result, group operating performance for the year is expected to be around the top end of market expectations, alongside continued strong management of working capital.”

“In the year, we continued to execute our growth strategy at pace. We are driving cashflow from our more established businesses to invest in our suite of exciting sustainable technologies that will enable decarbonisation and enhance circularity, including our portfolio of eLNO battery materials and hydrogen technologies.”

Opportunistic offer for Walls & Futures REIT

Andrew Hore
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0
Opportunistic offer for Walls & Futures REIT

Management of Walls & Futures REIT (LON: WAFR) believes that a bid from Virgata Services undervalues the supported housing developer, which is traded on the Access segment of the Aquis Stock Exchange. The share price has drifted downwards this year, and this appears an opportunistic bid.
The unsolicited 50p a share cash offer is well above the price that the shares were trading prior to the announcement but it is a 52% discount to net assets at the end of September 2020.
Virgata initially approached Walls & Futures REIT during February and offered 45p a share, which was immediately rej...

IMF lifts growth forecast for China in 2021

Liam Roche
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0
IMF lifts growth forecast for China in 2021

IMF now forecasting China to grow by 8.4% in 2021

China’s economic growth rate for this year has been raised by the International Monetary Fund (IMF) as the organisation says the route out of the pandemic-induced economic crisis is “increasingly visible”.

The IMF, based in Washington DC, increased its forecast for economic growth for China in 2021 to 8.4%, 0.3% higher than its prediction earlier in the year.

The Chinese economy grew by 2.3% despite the coronavirus pandemic in 2020, while the government set its own target of 6%, which many economists expect will be exceeded.

The renewed optimism around China appears to be a response to the anticipated global recovery.

“With global growth being stronger, you have more exports. The US rescue plan also will increase demand for China’s goods,” said Gita Gopinath, the IMF’s chief economist and director of research.

However, Gopinath did also say that Chinese growth was unbalanced and somewhat reliant government spending.

“It’s still very heavily reliant on public investment. And private consumption has not recovered as fast as we would have hoped.”

On order for it to be “a durable recovery, our hope is that fiscal measures and other support measures would work in the direction of supporting the recovery coming from the private sector, as opposed to the public sector”, she added.

The IMF raised its overall global 2021 growth estimate by 0.5% to 6%, while its projection for 2022 was lifted by 0.2% to 4.4%.

UK construction sector PMI reaches six-year high

Liam Roche
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0
UK construction sector PMI reaches six-year high

PMI for the construction sector comes in at 61.7 in March

The lockdown restrictions across the UK have not heeded construction according to data that has emerged.

Data published on Thursday has revealed that construction activity is at its highest point in over six years.

IHS Markit‘s purchasing managers’ index (PMI) for the construction sector has come in at 61.7 for March. The recorded figure is a steep rise on February’s number of 53.3 and well above a previous forecast.

IHS Markit said there had been “robust growth” in all sub-sectors of construction, as well as finding that the most jobs have been created in the sector for over two years.

Tim Moore, Economics Director at IHS Markit, which compiles the survey, commented on the march data:

“March data revealed a surge in UK construction output as the recovery broadened out from house building to commercial work and civil engineering. Total activity expanded to the greatest extent for six-and-a-half years as residential spending remained robust, commercial projects restarted and infrastructure contract awards moved ahead,” Moore said.

“Improving confidence among clients in the commercial segment was a key driver of growth, with development activity rebounding in sectors of the economy set to benefit the most from the improving pandemic situation. The increasingly optimistic UK economic outlook has created a halo effect on construction demand and the perceived viability of new projects.”

“Constrained supplier capacity and stretched transport availability continued to pose challenges for the construction sector in March. Short supply of products and materials pushed up purchase prices at the fastest rate since August 2008.”

“Continued pressures on supply chains are expected in the near-term, but these concerns did little to dampen confidence about the business outlook. The latest survey pointed to the strongest growth projections across the UK construction sector since those reported during a post-election bounce back in June 2015.”

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