The Market Call

The Market Call gives a periodic summary of major macro events, market themes and selected UK company-specific news.

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November 28, 2023

UK companies challenged but resilient

Macro & Overnight

US bond yields fell overnight as the Treasury market absorbed sizeable two and five-year bond auctions. The world’s largest capital market is proving resilient, and its price action supports the view that interest rates have peaked and the US economy is heading for a soft landing.

By way of a reminder that inflationary pressures and supply chains have not gone away, the Baltic Capesize Dry Goods Index rose 12.8% yesterday for the third straight day of increases to an 18-month high.


UK Company News

It is a busy day for UK corporate results and updates—phrases such as “resilient performance” and “challenging trading” feature in most company commentaries. 

Augmentum Fintech continued yesterday’s newsflow from the listed VC and private equity space, highlighting the wide valuation gap on offer between privately held assets and their current public valuations.   

DP Eurasia, the Domino’s operator in Turkey, says it is coping with Turkish inflation, which was last officially reported at over 60%.  

IG Design, the gift wrap and stationery supplier, reported continued uncertainty over consumer demand. However, profits and margins remain aligned with the Board’s expectations, and cash flow delivery is expected to be stronger. Note here. 

Supreme, the manufacturer, distributor and brand owner of fast-moving consumer products with a large share of low-cost vaping products, expects trading for FY 2024 to be significantly ahead of company-issued guidance, helped by its cost advantage in this category. It said the UK e-cigarette regulations review ends next week. However, it remains confident that the Government will continue to recognise the vaping industry’s important role in delivering the country’s ‘Achieving Smoke-free 2030’ initiative. 

Let’s see, but if correct, Supreme does look well positioned in this segment. 

Saietta, the unprofitable electric motor supplier, announced a successful placement to raise £6m—a modest but important step for the somewhat dormant UK smaller company capital market.

Prognosticator   

 

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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. 

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.