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- š± UK Economy More Resilient Than We Thought?
š± UK Economy More Resilient Than We Thought?
Private sector activity and consumer confidence data pointed to a potentially more stable economy than expected, Canadaās Brookfield joined the bidding race for Network International and Glencoreās shares slipped after its Q1 trading update.
Good morning. In todayās update - private sector activity and consumer confidence data pointed to a potentially more stable economy than expected, Canadaās Brookfield joined the bidding race for Network International and Glencoreās shares slipped after its Q1 trading update.
Markets
After a choppy day of trading, UK markets managed to end the week in the green as investors digested a number of economic data points across Friday. On the whole, the FTSE 100 (+0.1%) finished marginally ahead, whilst the FTSE 250 gained +0.7%. Miners were in the spotlight again as precious metal prices fell and Glencore updated markets on Q1 trading (below). GKN spinout Dowlais was the standout FTSE 100 performer (+4.3%), clawing back a small portion of losses from the previous day.
Top Stories
š UK economy looks resilient, despite retail sales miss
UK retail sales disappointed for March, driven by poor weather and dampened demand in department and clothing stores. Volumes of retail sales fell 0.9% - worse than the 0.5% drop forecasted and down from a 1.1% rise the previous month. (ONS)
On the other hand - the latest PMI (a measure of activity in the private sector) came in higher than expected, pointing to a potentially more resilient picture of the economy. The preliminary reading for April came in at 53.9, above economist estimates of 52.5, driven by a continued rebound in the services sector. Aprilās print represented the third straight month above 50 (a reading of 50+ signals growth). (PMI)
Another bright spot was GfKās monthly report which showed consumer confidence had increased significantly in April, despite the ongoing cost of living crisis. The Consumer Confidence Index improved to -30 from -38 in March (exceeding the -35 forecasted by economists), driven by a big improvement to peopleās views on personal finances. (GfK report)
š³ Bidding war kicked off for Network International
The race to acquire Network International intensified on Friday, as the payments company confirmed Brookfield had also submitted a competing non-binding offer. Canada-based Brookfield swooped in with a 400p proposal (valuing the entire business at around Ā£2.1bn), outbidding CVC/Francisco Partnersā previous offer of 387p. Brookfield may be more competitive in a bidding war because of potential synergies with Magnati, the UAE payments business it acquired a majority stake in last year. (Official)
āļø Glencore slipped despite a positive energy trading performance
Shares in Glencore - the FTSE 100 natural resources giant at the centre of a bid for Canadaās Teck Resources - dropped on Friday as it reported copper, zinc and nickel production lower than expected in Q1. On the upside, its trading unit (or āMarketingā) continued to outperform and is now expected to āexceedā the top end of its 2023 forecast range of $2.2bn-$3.2bn. Shares closed 2.2% lower on the day. (Official)
What Else Happened?
Economics / Politics / General
Dave Ramsden - Deputy Governor of the BoE - said that the UK must āstay the courseā on interest rate hikes; Ramsden claimed high inflation was a ābigger riskā than over-tightening.
Big Tech is about to be scrutinised more closely by the UK government, as the Competition and Markets Authority are set to be given more powers to target the growing influence of the largest platforms.
Deals
UK transport company FirstGroup are competing with infrastructure fund I Squared to acquire German-owned Arriva; reports suggest the business could potentially be valued around ā¬2bn, though FirstGroup is likely to only bid for Arrivaās non-UK assets, given regulatory hurdles.
Jersey-based grower of medicinal cannabis, Northern Leaf, has hired bankers to advise on a potential Ā£60m IPO in London this summer
Company News / Trading Updates
Shares in Royal Mail owner IDS edged up on Friday after the company announced a pay deal had been agreed with the Communication Workers Union - members will now vote on the proposal over the coming weeks.
š Global Snapshot
Deloitte became the latest company to announce staff cuts - the Big Four accountant announced that 1,200 jobs in the US would be slashed, mainly in the financial advisory unit.
Consumer goods giant Procter & Gamble boosted profit margins as the business benefitted from price rises across its product line, with only a small hit to volumes; shares rose 3.5% on the announcement.
German business software company Software AG is in talks with US private equity firm Silver Lake about a potential acquisition worth ā¬2.2bn.
Sundar Pichai - CEO of Google - made around $226m in 2022 inclusive of stock awards, despite announcing company-wide job cuts.
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