Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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October 30, 2023

Ascential demonstrates hidden value in UK equities

Macro & Overnight

Financial markets were again kept back from the edge by the continuing containment of the Hamas-Israeli conflict. Oil prices, bond yields and the gold price have all stabilised at elevated levels.

It is a busy week ahead for macro data. We get German Inflation and GDP data today, the Japanese interest rate decision and EU GDP and inflation data tomorrow, the US job openings data and the Fed rates decision on Wednesday, the Bank of England rate decision on Thursday and the US non-farm payroll data on Friday.

Investor focus will be less on rate decisions and instead more on signs of breakage and or deflationary recession.

UK Equity News

Chrysalis announced its quarterly NAV and trading update. At 134.6p, its NAV recorded a 2.2% decline over the period. It has net cash of approximately £23 m and a total liquidity position of £33 million. It reported that the IPO and private markets have shown signs of life, indicating that investor risk appetite is recovering somewhat.

Chrysalis invests in private unicorns that could become listed companies. Its shares trade at a 60% discount to the portfolio’s appraised NAV. Chrysalis needs to show it can realise the value of this portfolio at or close to its carrying value. However, the comments about the vital signs in the IPO market were somewhat muted. 

Ascential has announced the proposed sale of Digital Commerce and WGSN for a total EV of £1.4bn. 

Ascential, with a market cap of circa £1bn, has announced the sale of two of its three operating divisions for cash proceeds of £1.2bn, leaving it with its events business estimated to be worth between £750m and £1bn. Unsurprisingly, the shares opened sharply higher, up 35%. Ascential has sold its Digital Commerce business to Omnicom and WGSN to Apax in another example of the hidden value sitting in UK companies. 

Prognosticator  

 

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