Market report

Unite gains from student uplift | New chair for JD Sports


5pm: London closes flat

The FTSE 100 ended the session marginally positive, up just 7.16 points at 7,196.24.

The US economy defied fears of recession by adding more jobs than expected in June, with non-farm payrolls rising by 372,000.

Forecasts estimated an increase of 268,000, which may point to a stronger labour market than was predicted.

The unemployment rate was steady at 3.6%

7am: Unite sees student demand rising

Student accommodation provider Unite said it continued to make good progress in sales during Q2, with strong demand from both UK and international students.

Across the group’s entire property portfolio, 90% of rooms are now sold for the 2022/23 academic year, ahead of pre-pandemic reservation levels (2021/22: 81%, 2020/21: 80%, 2019/20: 89%).

“Given the strong sales performance to date, we are increasingly confident in delivering occupancy of 97% for the 2022/23 academic year and achieving rental growth at or just above the top end of our guidance of 3.0-3.5%,” it said in a trading update.

“We continue to monitor Covid-19 cases, travel restrictions for international students and the potential for further lockdowns, particularly in China.

“There are no Covid restrictions on UK Higher Education and Government guidance emphasises that universities should prioritise delivery of face-to-face teaching.

“Demand also remains strong from international students across multiple markets and we expect that international students will be able to travel to the UK for the start of the 2022/23 academic year in September, consistent with our experience for the 2021/22 academic year.”

At 30 June 2022, the group’s property portfolio was independently valued at £2.967 billion, a 3.5% increase on a like-for-like basis during the quarter.

Joe Lister, Unite Students chief financial officer, commented : “We continue to make good progress with bookings for the 2022/23 academic year with reservations now ahead of pre-pandemic levels, demonstrating the strength of student demand.

“This momentum underpins our confidence in a return to full occupancy for the 2022/23 academic year and rental growth at or just above the top end of our guidance of 3.0-3.5%.”

7am: New JD Sports chair

JD Sports Fashion has appointed veteran retailer Andy Higginson as chair from 11 July.

Mr Higginson has 28 years of continuous non-executive director experience on PLC boards, including senior leadership roles over nearly 15 years at Tesco.

Most recently, he was chair of William Morrison Supermarkets from January 2015 until the takeover of the business by private equity firm CD&R last November. During this time he oversaw a major turnaround of the business and significant value realisation for shareholders. He is also currently senior independent director at FanDuel and Paddy Power owner Flutter.

Global markets

Asian shares rose as fears of an economic slowdown cooled somewhat, though news of the shooting of former Japanese Prime Minister Shinzo Abe sent a jolt through the market.

Abe was shot while campaigning in the city of Nara, a government spokesman said, causing the dollar to fall as much as 0.4% on the yen , and the Nikkei share index to pare its gains.

Shanghai reopened most cinemas, as it pursues a policy of gradual resumption of daily activities following the lifting of a two-month COVID-19 lockdown in June.

China’s Premier Li Keqiang was quoted by state media on Thursday as saying that the world’s second-largest economy was recovering from the supply shocks incurred while fighting COVID earlier this year, “but the foundation is unstable.”

China is facing geopolitical headwinds, a property market downturn, and rising borrowing costs in most of its export markets, and some analysts say its growth target of around 5.5% this year may be out of reach.

US employers are likely to have hired the fewest workers in 14 months in June, but the jobless rate probably remained near pre-pandemic lows, underscoring labor market tightness that could encourage the Federal Reserve to deliver another 75-basis-point interest rate increase later this month.

Despite the anticipated slowdown in job growth last month, the Labor Department’s employment report today could ease fears of a recession that have mounted in recent days following a raft of tepid economic data, ranging from consumer spending to manufacturing.

Nonfarm payrolls likely increased by 268,000 jobs last month after rising by 390,000 in May, according to a Reuters survey of economists. That would be the smallest gain since April 2021 and just more than half of the monthly average of 488,000 jobs this year. 

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