Market report

Rate rise talk hits London | YouGov ahead | Apple soars


5pm: London ends on downbeat note

It was a downbeat end to the week as investors looked ahead to a likely interest rate hike from the Bank of England next week on the back of signals from the Fed on Wednesday of rate rises in the US.

The FTSE 100 index closed down 88.24 points, or 1.2%, at 7,466.07, falling 0.4% over the course of the five trading sessions.

Phoenix Group fell 2.8% after abrdn confirmed it sold 40 million shares in the insurer for £264 million. Abrdn shares ended 1.6% higher.

Brent oil was once again quoted above $90 which it broke through this week for the first time since 2014. At the close of the equity market in London it was trading at $90.59 a barrel from $89.88 late Thursday.

10.30am: FTSE 100 runs out of steam

The recovery in the FTSE 100 ran out of steam – down just under 100 points at 7,454.85 – as a turbulent start to 2022 continued.

Despite the fall, the index is still comfortably ahead of most global counterparts year-to-date.

AJ Bell investment director Russ Mould says: “Once seen as about as fashionable as socks under sandals thanks to the absence of any big tech firms, the FTSE 100 is enjoying a renaissance amid renewed appetite for tobacco, banking and resources stocks – the latter helped by an oil price at $90 per barrel.

“Potential EU and UK sanctions on Russian gas projects, in an attempt to push back against the feared Russian invasion of Ukraine, would only add to the upward pressure on energy prices.”

7.15am: Abrdn sells Phoenix shares

Abrdn has sold just under 40m shares in Phoenix Group at 660p in a placing to institutional investors, raising gross proceeds of about £264m.

The placing on 1 February will leave Abrdn with a stake of about 10.4% in Phoenix and it will continue to appoint a director to the company’s board.

Full story here

7am: Character Group

Character Group, which distributes Peppa Pig, Scooby-Doo and Fireman Sam toys, said it will return around £13.5m to its shareholders via a tender offer priced at 630p per share.

The buyback is equivalent to 10% of the company’s share capital.

The tender price is at an 8.4% premium to the average middle market closing share price in the 60 trading days ended 27 January 2022.

In a trading update earlier this month, Character Group said it expects to meet current market forecasts for the year to end-August 2022. 

7am: YouGov ahead of forecast

Research and data analytics group YouGov said it has performed well in the six months to the end of January, with continued growth seen across all divisions and geographies.

The group said the transformation of the sales structure over the past year has resulted in larger and more strategic client wins. Geographically, the US and Mainland Europe remain the key growth drivers.

It expects full year results to 31 July 2022 to be slightly ahead of the board’s expectations.

“The sales pipeline remains robust giving us continued momentum into the second half of the financial year. Consequently, the board remains confident of achieving top-line growth for the full year in line with the current long-term strategic growth plan, with modest margin expansion due to continued investment in the business.”

During the period, the company entered into a new revolving credit facility (RCF) with an initial drawdown of £20 million for general corporate purposes. The facility has a three-year term with the option to extend for up to an additional two years.

7am: SMS CEO steps down

Alan Foy is stepping down as chief executive of Smart Metering Systems and will be replaced in March by chief operating officer Tim Mortlock.

In a trading update the company said FY 2021 underlying pre-tax profit is expected to be marginally ahead of consensus, after being upgraded in September 2021.

The board said that while the failure of some energy suppliers has resulted in “movement in our customers’ metering portfolios” the net impact on the group’s pipeline has been negligible.

Full story here

Global markets – Apple tops estimates

Apple topped expectations with quarterly sales up 11.2% from a year earlier to $123.9bn, with growth in all regions except for Japan.

The company is overcoming the costly global shortage in computer chips and its record sales over the key Christmas quarter saw it beat profit estimates.

It has handled supply-chain challenges such as factory shutdowns and shipping delays brought on by the pandemic better than any of its top peers, analysts said.

Profit was $34.6 billion, or $2.10 per share, compared with analysts’ expectations of $31 billion and $1.89 per share.

Apple shares rose about 5% in after-hours trading on Wall Street last night, erasing half their losses on the year.

The figures will offer some comfort in the wake of the wider tech sell-off, though all US indices closed lower, the Nasdaq Composite down 1.4% and both the Dow Jones Industrial Average and S&P 500 down 0.5%.

In the US, although the Dow Jones made a decent fist of things, closing 7 points lower at 34,161 the broader-based S&P 500 shed 23 points at 4,327.

Markets are also increasingly concerned by growing talk of military action in Ukraine.

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