📈 Mortgage rates rocket

Good morning. In today’s update - mortgage rates are rocketing, Sainsbury’s sees signs of easing food inflation, Ineos’ Jim Radcliffe slammed the UK’s CMA and Musk/Zuckerberg are back at it again after Instagram announced the launch of its Twitter competitor.

Markets

• A quiet day for London stocks on Tuesday as investors struggled for direction and US markets were closed for 4th July celebrations.

  • The FTSE 100 (-0.1%) fell marginally, whilst the FTSE 250 (+0.1%) squeezed out a small gain.

• Retailer Dunelm Group (-4.3%) took a hit after being downgraded by analysts at JP Morgan, whilst Sainsbury’s (-1.8%) was also a surprise loser despite a relatively positive trading update.

Corporate News

Like-for-like sales at Sainsbury’s increased by a better-than-expected 9.8% over the last 16 weeks, driven by consumers buying more items; CEO Simon Roberts said customers were starting to see prices “improving” after the UK’s second biggest supermarket invested £60m bringing down the prices of essential goods. (Link, Sainsbury’s)

Sustainability-led investment firm Foresight Group said it was keeping its eyes open for further M&A opportunities after growing assets under management by 38% in the year to March, driven by the acquisitions of Infrastructure Capital Group and the tech venture unit of Downing LLP. (Link)

London bakery chain Le Pain Quotidien is set to close the doors on 90% of its stores after falling into administration, with 250 staff set to be made redundant. (Link)

Deals

UK M&A activity set for a rough ride in the second half of the year, according to adviser Peel Hunt, as foreign investors stay on the sidelines due to uncertain economic conditions; buyout activity was already subdued, with just £12bn of offers tabled in the first six months of 2023, down 45% on the same period last year. (Link)

Troubled tech firm WANdisco secured a $30m lifeline from investors as it looks to put the recent fraud episode behind them; the Sheffield-based firm was forced to write off over $100m in bookings after “irregularities” were found in its accounting back in March. (Link)

In today’s VC update:

• Tandem - a UK-based neobank offering sustainable financial services - bagged £20m in funding from existing investor Quilam Capital. (Link)

• Immersive Fox - a London-based, AI-led video production startup - raised €3.3m in seed funding from Redseed VC, Monte Carlo Capital and Altair. (Link)

• Nolea Health - a marketplace for mental health professionals - raised £1m in seed funding led by Frontline Ventures. (Link)

Economy / General

Average five-year fixed mortgage rates hit 6% for the first time since last autumn’s mini-budget fiasco, as banks continue to hike prices in the face of a surging BoE base rate; the PM’s spokesperson admitted it was "a “difficult” time for homeowners. (Link)

Ineos owner (and potential Manchester United suitor) Jim Radcliffe joined the list of high-profile executives criticising the UK’s business environment; Ineos was blocked from acquiring assets from Swiss company Sika earlier in the year by the Competition and Markets Authority, leading to Radcliffe declaring the UK was becoming “increasingly hostile” to business. (FT, Link)

Environmental-related activist campaigns are surging in UK boardrooms this year, Alvarez & Marsal has found, with heavyweights such as BP, Shell and Barclays having faced shareholder backlash; the report found that environmental campaigns had tripled as a percentage of overall activist activity since 2019. (Link)

“Stay in your crease”, Australian PM Anthony Albanese tells Rishi Sunank after the UK PM claimed the controversial dismissal of Jonny Bairstow in the 2nd Ashes test match wasn’t in the spirit of the game. (Link)

🌎 Global Snapshot

News

In the latest battle between Musk and Zuckerberg, Instagram announced it would be launching its own Twitter rival (‘Threads’) on the 6 July; the “text-based conversation” app looks similar in nature to Twitter, with users able to connect via their existing Instagram details. (Link)

Yahoo is readying a return to public markets, according to CEO Jim Lanzone, having restructured the business following a spinout from Verizon; Private equity group Apollo bought the business in 2021, and Lanzone admitted that being private had allowed the company to make the necessary changes away from the public eye. (FT)

Blackstone’s Steve Schwarzman topped the list of highest-paid CEOs in 2022 at $253m, with Alphabet’s Sundar Pichai in close second. (WSJ)

Markets

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