Market Prognosis

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

October 16, 2023

Cerillion defies the telco gloom

Macro & Overnight

Oil, gold and European natural gas prices have all firmed over the weekend, while bond yields have eased back slightly.

There is a sense of quiet before the storm in the Israeli-Hamas conflict, with a frenetic level of diplomacy taking place.

Poland looks likely to return a pro-EU, centre-left coalition government led by Donald Tusk following yesterday’s election.

Macro data this week:

UK unemployment data tomorrow and inflation numbers on Wednesday.

In the US, we get retail sales figures on Tuesday and a speech from Fed Chair Powell on Thursday.

 

UK Company News

Cerillion, the telecoms software provider, issued a strong trading update, and the picture remains positive into the second half. Its profit before tax will be meaningfully ahead of the consensus market forecast of £14.3m. 

Cerillion provides customer billing and other software solutions for the telecoms industry. The shares have been weak lately, as Spirent and Calnex both recently warned due to lower 5G capex spending from their telco customers. However, Cerillion helps telco providers save costs and improve operating efficiency, while Spirent and Calnex depend on their capital expenditure budgets. Consequently, Cerillion enjoys a more durable revenue stream but is more highly rated. Bargain hunters will be focusing on Spirent (shares down 45% over the last 3 months) and Calnex (down 60%).   

Prognosticator 

This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.

Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position,  and/or may perform services or solicit business from, any of the companies or related securities mentioned.

Any prices quoted in our research are as at the previous day’s close.