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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May 23, 2024

Barbarians in the UK’s boardrooms

Macro

Nvidia beat expectations overnight, and shares rose 6% after hours (or one HSBC). Revenue for the three months to the end of April was $26bn versus consensus estimates of $24.7bn with annualised revenue growth of over 260%. 

The FOMC minutes suggested that US interest rates might remain stickier than previously thought. The USD (DXY) firmed slightly, and precious metals and commodities weakened. 

Japan’s 10-year government bond yield topped 1% on Wednesday for the first time since May 2013. As yet, this move has not pressured the USD/Yen rate. 

The UK election is called for July 4th. All commentary indicates Sunak has no chance of retaining power. The debate is over how large a majority Labour secures. 

UK Companies

Hargreaves Lansdowne has rejected a 985p, £5bn PE offer. In the other FTSE 100 M&A arm wrestle, Anglo American is discussing terms with BHP, although no agreement has been reached. 

The barbarians are at the FTSE’s gate or even in its boardrooms. HL and Anglo represent £50bn of value, about 3% of the FTSE 100 market capitalisation.  

CVS noted that the CMA confirmed its decision to launch a market investigation into the vet sector. Legally enforceable potential remedies include mandating the provision of certain information to consumers, imposing maximum prescription fees, and ordering the sale or disposal of a business or assets.

AJ Bell said there is a clear and well-understood need for individuals to take control of their long-term finances and investment platforms, which provides an excellent solution. 

Bloomsbury Publishing’s FY sales and profits were up 30% and 57%, respectively, with a full-year dividend up 25%. The company has benefited from the increasing demand for fantasy fiction. Its outlook for the current year is slightly ahead of current consensus expectations. 

Henry Boot reported that land prices have remained stable in Q1 24, with housebuilders showing encouraging site bidding levels. The UK planning system is experiencing ongoing delays; Hallam continues to use its expertise in unlocking the planning system and is currently working up several applications and appeals to increase the number of consented sites to deliver a full-year performance in line with market expectations and medium-term strategic objectives.

Cohort, the defence technology providerupdated that trading is slightly ahead of expectations. it reported a strong order intake of c.£387m (2023: £218m) and an order book of c.£518m (April 30th 2023: £329.1m). 

Energean’s three months to March saw revenue increase 43% YoY and net debt to EBITDA increase to 3x. It said its Karish FPSO uptime during the quarter was 98%, unaffected by the war in Gaza. 

Hill & Smith’s operating profit will likely be slightly ahead of the top end of analyst expectations. 

RWS’s CEO to step down.  

Wizz Air is marking its 20th anniversary by reporting that it flew 62 million passengers last year and sees sustained demand and positive booking momentum for the summer. 

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