FTSE 100 mobilizes to alleviate stagflation fears and bargain hunters


The FTSE 100 closed 1.1% higher on Wednesday as stocks rebounded after a surge in US bond yields triggered a sell-off in the previous session. Some of the concerns about stagflation have eased, which, along with the build-up of bargain hunters, has pushed stocks higher, said Chris Beauchamp, IG Group chief market analyst. “A small drop in Treasury yields eased some of the pressure on equities, and with market insiders once again approaching ‘washout’ levels, the urge to buy the decline returned,” Mr. Beauchamp. There is only one more day left in the third quarter and volatility remains high from summer levels, but current market action still has a sense of ‘cleaning up the bridges’ as investors brace for the fourth quarter, he said.

 
Companies News: 

Stranger Holdings agrees to cancel takeover

Stranger Holdings PLC said on Wednesday it has reached an agreement to acquire certain Africa-based resource assets, which will constitute a reverse takeover of the company given the scale of the acquisition.

Arbuthnot Banking sells a new stake in Secure Trust

Arbuthnot Banking Group PLC said on Wednesday it had raised gross proceeds of about 2.5 million pounds ($ 3.4 million) through the sale of an additional 220,000 common shares of Secure Trust Bank PLC.

CMO group achieved pre-tax profit in the first half of the year

CMO Group PLC on Wednesday announced a move to pre-tax profit for the first half of 2021 and said its forecast for double-digit sales growth in the second half was in line with expectations for the full year.

Avingtrans posted to pre-tax profit for 2021

Avingtrans PLC said on Wednesday that it had moved to pre-tax profit for fiscal 2021 as revenues increased, and that despite the effects of the pandemic, its markets continue to grow and opportunities for mergers and acquisitions remain. a priority.

Fintel PLC President Gary Hughes resigns and Ken Davy is appointed Interim President

Fintel PLC announced on Wednesday that non-executive chairman Gary Hughes was stepping down with immediate effect for personal reasons and that vice chairman Ken Davy would replace him on an interim basis.

Sanderson Design appoints Mike Woodcock as new CFO

Sanderson Design Group PLC announced on Wednesday that Mike Woodcock will become the company’s chief financial officer and group director on November 1.

Roquefort preliminary agrees to buy Lyramid for £ 1million

Roquefort Investments PLC announced on Wednesday that it has entered into a preliminary agreement with Provelmare Holding SA for the purchase of Lyramid Ltd. for £ 1million ($ 1.4million) in a reverse takeover.

Harvest Minerals Reduced 1H pre-tax loss, 2H performance considered robust

Harvest Minerals Ltd. said on Wednesday its pre-tax loss in the first half had narrowed as revenues grew and the board expects a strong performance in the second half.

Lukoil acquires 25% stake in Caspian offshore project from BP

Lukoil PJSC announced on Wednesday that it has agreed to acquire a 25% stake in the Shallow Water Absheron Peninsula exploration project in the Azerbaijani Caspian Sea sector from BP PLC for an undisclosed amount.

MyCelx Technologies Achieves One Month Profit Thanks To Higher Revenue

MyCelx Technologies Corporation on Wednesday reported lower pre-tax profit for the first half of 2021 as revenue increased as part of a resurgence in tendering activity in the industries in which the company operates.

 
Market Talk: 

Derwent London margins to be challenged by flat office markets

1308 GMT – Derwent London’s targeted development profit margins appear likely to remain below historical levels in what appears to be an increasingly complex market, according to RBC Capital Markets. The property investment and development firm is likely to face challenges despite its relatively well-positioned portfolio and strategy, with relatively stable rental market forecasts for London offices and as tenants become more and more more demanding and that costs increase, according to the Canadian bank. “At the same time, we expect the drag caused by pre-redevelopment of older buildings to be more noticeable in a stagnant market,” RBC said. The bank maintains its underperformance rating and its 2850 pence price target on Derwent, saying its discount to historical multiples is justified by the company’s lower returns and growth.

Sterling moves in the opposite direction to UK yields

1305 GMT – The British pound has moved in the opposite direction of UK yields since early September as the currency failed to benefit from widening short-term swap spreads in favor of the UK, according to RBC Capital Markets . One explanation for this is that the British pound may be starting to behave more like an emerging market currency, where widening credit spreads reflect increasing credit risk, leading to an increase in the premium of currency risk, said Adam Cole, RBC currency strategist. “It could also reflect markets concern over excessive Bank of England tightening as rate expectations rise, while real household incomes are squeezed by rising energy and gas prices. others, as well as by the decrease in benefits paid. ”

London shares of BHP could take silver, quotation hit

1221 GMT – London-listed shares of BHP Group could lose ground amid declining liquidity and uncertainty surrounding the miner’s plans to remove its listing on the FTSE 100, according to RBC Capital Markets. With the turnaround in the real estate cycle in China, BHP’s excess cash flow dissipated, while falling iron ore prices led to the normalization of BHP’s profitability metrics, according to RBC. “The complications and uncertain momentum of unifying the double-listed companies could jeopardize the recently accumulated premium on the London line,” said RBC analyst Tyler Broda. “For global investors, we see better options elsewhere and are downgrading to sector performance. In Australia, BHP continues to climb and the recommendation remains unchanged [at outperform]. ”

Medium-term prospects for the SSP seen as positive

1141 GMT – The SSP update implying 2021 revenue of around £ 820million was encouraging from a balance sheet perspective, Goodbody said. The Foodservice Operator’s 2H was better than Goodbody’s expectations, especially from a cash flow perspective, reducing the risk of the business in the recovery phase, with healthy liquidity of £ 900 million. The fact that he has reiterated his expectations for 2024 is positive, especially from a margin perspective, according to the Irish brokerage. “We remain positive on SSP’s medium-term outlook and believe there is a significant market share opportunity for the group alongside the underlying passenger recovery,” the broker said. Goodbody evaluates the purchase of shares. Shares are down 4.5% to 276.70 pence.

IAG stock has the potential to fly higher

11:35 GMT – Shares of International Consolidated Airlines Group have potential favorable winds, Deutsche Bank said, increasing its recommendation to the owner of British Airways and Iberia to buy holdback and its target price to 260 pence from 225 pence. With the United States poised to ease entry requirements in early November, and stocks fell around 217 pence in March – their highest this year – Deutsche says there is better backdrop for IAG shares for progress. “So we are raising IAG to buy on hold, with an increase [target price] 260 pence … which implies more than 40% upside potential for equities, ”says analyst Jaime Rowbotham. The shares rise 1.5% to 185 pence.

Rising UK mortgages and consumer borrowing pose a risk to the recovery

11:18 GMT – An increase in UK mortgage and consumer lending in August highlights some risks the economy could take a small step backwards, according to Capital Economics. Bank of England currency and credit data released on Wednesday showed households took out £ 400million in consumer credit in August, while mortgages rose by £ 5.3bn sterling during the month, reversing a drop of £ 1.8 billion in July before the stamp duty holiday ended. . “The timid increase in consumer credit in August further proves that the economy has not regained much dynamism after stagnating in July,” said UK chief economist Paul Dales, adding that there is a risk that at some point the economy will take a step backwards. .

PFS still in the middle of its recovery phase

1107 GMT – SSP is still in the midst of its recovery and while progress is being made, it could be some time before profits return to pre-pandemic levels, Russ Mold said at AJ Bell. Continuing restrictions on travel and businesses questioning the need to spend as much on travel as before Covid-19 means demand from domestic travelers is greater than that from international travelers and businesses, Mold said. For the food and beverage outlet operator, this means increased pressure to reduce costs and manage cash flow carefully, as countries with slower vaccine rollouts experience slow travel activity. , creating an uneven background, Mold explains. “The SSP also faces higher inflation in input costs and difficulties in finding enough workers, among other factors,” he says.

 

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

 

(END) Dow Jones Newswires

September 29, 2021 12:20 p.m. ET (4:20 p.m. GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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