Daily Business Live

GDP growth beats forecast; Enquest agrees $750m facility


5pm: FTSE 100 closes at pandemic high

London markets started the weekend party early with the FTSE 100 hitting a pandemic high closing up 46 points or 0.65% at 7,134, says Danni Hewson, AJ Bell financial analyst.

“All indices made pretty decent gains fuelled by economic data which showed the UK economy speeding along the road to recovery.  But it’s hard not to gnaw on that inflation bone, particularly with the latest UK data due out next week.

“In the US, markets were undecided.  Most economists expect the Fed won’t change very much at all when it meets next week, rising prices seem to have primarily come from transitory factors and jobs figures are still subdued.”

9am: Blue chips higher

Blue chips were heading towards a positive end to the trading week with the FTSE 100 up nearly 37 points at 7,125.16.

AJ Bell investment director Russ Mould said the index built on on a strong finish to trading on Wall Street last night (see below).

“Investors may have been nervous ahead of yesterday’s US inflation numbers but despite consumer prices rising at their fastest rate since 2008, and more than economists expected, shares were up,” he said.

“Perhaps central banks really have convinced the markets that any rise in inflation will be short-lived and will not force them to ramp up rates too rapidly.”

7.10am: Sigma acquired

Sigma Capital Group, the Edinburgh-based residential development and urban regeneration specialist, has been acquired in a deal that values the group at £188.4 million.

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7.05am: Whitehorn heads up space firm IPO

Will Whitehorn, former president of Virgin Galatic, Richard Branson’s spaceflight company, is supporting the launch of the world’s first listed space technology fund in the UK.

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7am: Monthly GDP

LK Bennett Edinburgh shop

Britain’s economy grew by 2.3% in April as Covid restrictions eased and sectors such as high street retail and hospitality re-opened.

It was the fastest monthly growth of gross domestic product (GDP) since July last year but fell slightly below economists’ forecast of a 2.4% increase.

Shoppers spent more as non-essential shops reopened and tere was also more spending in pubs, cafes and restaurants as restrictions eased the Office for National Statistics (ONS) said.

April’s GDP remains 3.7% below the pre-pandemic levels seen in February 2020, but is now 1.2% above its initial recovery peak last October.

The more customer-facing service sector grew by 3.4% during the month while output in production fell by 1.3%, the worst fall since January.

Despite recent reports of skills shortages and a growing workload, the construction sector contracted by 2% following a strong March, with new work slowing down faster than repair and maintenance.

7am: Enquest agrees $750m facility

EnQuest, an independent oil and gas production and development company has agreed a $600 million debt facility and an additional $150 million for letters of credit for up to seven years to simplify its existing capital structure and finance the acquisition of a 26.69% interest in the Golden Eagle assets announced in February.

7am: Grainger in build-to-rent deal

Grainger, the UK’s largest listed residential landlord with 9,109 operational rental homes and a further 8,851 in its £2.1bn pipeline, has acquired The Forge, a stabilised income producing Build-to-Rent asset comprising 283 rental apartments and a ground floor commercial unit via a corporate acquisition for c.£57m from Moorfield Real Estate Fund III.

This is Grainger’s first purpose built, BTR investment in its home city of Newcastle, where the company was established in 1912 and remains headquartered.

The Forge, completed in 2019, is the only stabilised BTR asset in Newcastle.

The purchase price represents a gross yield of c.6.25%, which Grainger expects to manage in line with its standard rental margin of over 75%.

Global markets

The focus in the US was on inflation, with the consumer prices index hitting its highest levels since 2008.

The headline inflation rate rose by 0.6% against an expectation of 0.4%. Core inflation rose by 0.7%.

Despite the inflationary pressures markets were generally higher across the board. The Dow Jones Industrial Average rose19 points, while the S&P 500 added 20 points.

Japan’s Nikkei 225 is 21 points firmer while Hong Kong’s Hang Seng index is 107 points higher.

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