Market report

US jobs rise dashes rate cut hopes | Superdry bid talks

Superdry is in talks about going private

Stocks in London suffered as a surge in hiring by US companies dampened hopes of an early interest rate cut.

The addition of 353,000 jobs in January, nearly double the 180,000 that had been expected by economists, is likely to put pressure on wages, and therefore weaken the case for a rate cut.

ING’s James Knightley said the jobs figure was “crazy strong,” and means the Federal Reserve will be in “no hurry” to cut interest rates.

Financial markets have bet on at least four rate cuts from the Fed this year, but have pushed out the first easing from March to June, a sentiment likely to take hold in the UK.

At the close, the FTSE 100 index gave up 7 points to finish at 7,616 for a 0.1% loss on the day.

The UK’s retailers saw a 2.8% fall in footfall for January, largely attributed to adverse weather conditions, which at least was a slight improvement on December’s 5% decline.

High streets saw a 2.3% decrease in foot traffic, while retail parks experienced a 1.8% decline, and shopping centres were down by 5%.

Fashion brand Superdry is in talks with the owner of Laura Ashley and an investor which previously backed Paperchase about a bid to take the group private.

Julian Dunkerton has held initial discussions with Gordon Brothers and Rcapital, both of which specialise in investments in financially challenged companies, about helping to finance an offer for Superdry.

In a statement on Friday responding to a spike in its share price, Superdry told Sky News: “Julian Dunkerton has… confirmed… that he is engaged in discussions with potential financing partners (“Potential Sponsors”) for the purposes of considering options in respect of the company, which may include a possible cash offer for the entire issued and to be issued share capital of the company, not already owned by him.

“These discussions are at a preliminary stage and no decisions have been made.”

The shares soared 118%, helped by news that Norwegian alternative investment fund First Seagull had acquired a 5.3% stake. There was also talk of a bid from US private equity firm Sycamore Partners and Ted Baker owner Authentic Brands Group.

BT Group rose 2.16% as Citi reaffirmed its ‘overweight’ stance on the company following an update on Thursday.

Johnnie Walker to Guinness giant Diageo added 1.08% as word spread that the company had initiated the search for a new chairman amidst a notable slowdown in sales in key growth markets.

Executive search specialist Russell Reynolds Associates was said to be assisting in identifying a successor to the current chairman, Javier Ferran.

On the Alternative Investment Market, Scottish energy firm Parkmead rose 1.5p (9.84%) to 16.75p after it reported its highest level of gas production in nearly four years thanks to a discovery in the Netherlands.

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