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ArvinIG

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  1. ArvinIG
    While the Tesla share price remains in the stratosphere, a perfect storm of institutional selling, reported faults, new competition, and the Omicron variant could together mark the end of its bull run.

    Source: Bloomberg   Shares Tesla, Inc. Stock market index Stock Investor Option   The Tesla (NASDAQ: TSLA) share price has been volatile over the past few weeks. On 4 November, the electric vehicle (EV) stock hit a high of $1,230, before falling to $1,013 by 15 November. Then it rose to $1,157 a week later, before falling to $1,009 on 6 December, briefly dropping below its landmark $1 trillion market cap. Currently, it's recovered to $1,052.
    After the pandemic-induced mini-crash, Tesla was worth $85 per share on 20 March 2020. Since then, it’s risen 1,137%. But its meteoric rise may now be over.
    Tesla share price: the feedback loop
    Tesla has delivered exceptional returns for investors over the past two years. As its stock value has accelerated, it has become subject to a positive feedback loop. Fresh investors continue to pour money in, growing the share price ever faster. In December 2020, the company entered the S&P 500, with a weighting of 1.6%. At its height last month, it was worth about 2.5% of the index. And as the S&P 500 is the most heavily tracked index in the world, Tesla’s admission saw ever more investors pile in.
    With the stock skyrocketing in value, it’s become included in 244 Exchange Traded Funds. In July 2018, it was a component of just 106. And Goldman Sachs Open My IG the value of Tesla options has averaged about $241 billion per day over the past few weeks. It believes Tesla is a ‘critical driver of the market.’ And it’s by far the most traded share on IG right now, making up 10.3% of all trades. Moderna comes a distant second at 3.6%.
    But could Tesla soon return to fundamentals? It’s delivered around 600,000 cars so far this year. Meanwhile, Toyota alone sold over 9,000,000 in 2020. If monetary policy tightens, its exuberant growth prospects could be reined in, and fast.

    Source: Bloomberg An end to the bull run?
    The SEC is ‘actively investigating’ whether Tesla knowingly sold unsafe solar panels, with a whistle-blower saying that it ‘failed to properly notify its shareholders and the public of fire risks associated with solar panel system defects over several years.’ The problem could be costly, affecting 60,000 residential customers as well as 500 government and commercial accounts. And CEO Elon Musk is already no stranger to SEC scrutiny.
    After a Twitter poll in November, he’s sold 10.1 million Tesla shares for about $10.9 billion. However, he’s exercising options to buy the shares back at $6.24 per share. Having bought 10.7 million shares since he started selling, he now owns nearly 600,000 more than when he started. As he must exercise the options before they expire in August next year, it’s possible that the SEC will deem his Twitter poll as misleading to consumers.
    In addition, the New York Times has reported that Tesla ‘may have undermined safety in designing its Autopilot driver-assistance system for electric cars.’ The US’s National Highway Traffic Safety Administration is currently investigating whether this might be why there have been ‘at least 12 accidents in which Tesla’s using Autopilot drove into parked fire trucks, police cars and other emergency vehicles.’
    And Cathie Wood’s ARK Innovation ETF has been offloading the stock, selling 33,919 shares on Monday to invest in the DocuSign dip. The famous investor has already sold hundreds of thousands of Tesla shares so far this year.
    Meanwhile, Rivian's $99 billion and Lucid's $72 billion market caps have both been making headlines, and it's only a matter of time before more challengers want a piece of the pie. Retail investors may think their growth opportunities are too big to ignore, while institutions now have different options to invest in the EV revolution.
    Politically, Musk is experiencing tension with US President Jo Biden. In August, Tesla’s CEO was angered to miss out on an invite to an EV summit at the White House, saying that Biden ‘didn’t mention Tesla once.’ And yesterday, he called Biden’s proposed $2 trillion ‘Build Back Better’ bill, ‘insane’ saying that ‘there’s no need for support for a charging network.’
    With the rest of the NASDAQ falling over Omicron fears and potential interest rate hikes, the Tesla bull run might finally be over. But as one of the world’s highest-volume stocks, it could continue to defy gravity.
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    Charles Archer | Financial Writer, London
    09 December 2021
  2. ArvinIG

    Will Alibaba be the next DiDi?

    By ArvinIG,


    Analyst Article
    The short journey of the Chinese ride-hailing giant is the smallest of the overseas listed Chinese technology giants, with total losses amounting to more than $1 trillion since February 2021.

    Source: Bloomberg   Shares DiDi China Alibaba Group IPO Stock   2021 is an extraordinary year for US listed Chinese stocks. Just when investors are getting ready to turn over the page, DiDi Global Inc's withdrawal from the New York stock market reminds us that it may not be over yet.
    Only five months after going public, China’s app giant DiDi Global, the largest ride hailing company with 10.9 million active daily users, announced to switch its listing to Hong Kong last Friday. After five volatile months, DiDi’s stock is now priced with an over 50% discount to its IPO price ($14).
    What happened to DiDi?
    DiDi’s delisting plan didn’t come without warning. It’s not news to traders that the Chinese government has opposed the company’s New York IPO from early stages, reason being concerns over potential leakage of sensitive data to the US, viewed as the main geopolitical rival to China. As a response to DiDi’s ‘unapproved’ listing, within days of the initial public offering, Beijing announced to restrict DiDi’s app downloads and started to crackdown on technology companies listed overseas. DiDi, slumped by 44% in the first month, dropped the most in its initial months among all Chinese IPOs.

    Source: TradingView Perhaps what surprised the markets most is not just the withdrawal of DiDi, but the extreme power policy maker hold over giant firms. Even the market has repeatedly witnessed Chinese tech companies grappling with Beijing’s tightened regulations, ranging from digital service, education to online games and the regulatory risk for Chinese companies is still way beyond most investor’s expectations.
    Who will be the next DiDi?
    The short journey of the Chinese ride-hailing giant is the smallest of almost all the overseas listed Chinese technology giants, with total losses amounting to more than $1 trillion since February 2021. Amongst them, Alibaba is one of the most prominent, whose shares have plummeted by more than 55% since February, landing on its four-year-low this month.
    So, will Alibaba or any other data-rich Chinese company repeat the story of DiDi in the near future?
    This month, Beijing was reported drafting regulations to effectively ban companies from going public on overseas markets, while the US government is also pushing ahead to remove Chinese and Hong Kong listed companies if they don’t comply with Washington’s disclosure requirements. Both sides show little sign to ease the trading environment for Chinese stocks but opens the door for any possibility.
    No one can predict what may come next for these bruised Chinese leading firms, however, the market has certainly priced in the soaring risks. For example, pessimistic analysts disclosed their value of Alibaba at all-time low of 13 times projected earnings, down almost 30 times from a year ago, compared to its e-commerce peer Amazon’s 66 times.

    Source: macrotrends.com Alibaba technical analysis
    Alibaba Group Holding Ltd (All Sessions) rose this week after announcing a reorganisation of its e-commerce teams and appointing a new Chief Financial Officer. In addition to this, the People’s Bank of China’s decision to expand support for the slowing down economy by reducing banks’ reserve requirement ratio also helped to boost the broad Chinese sectors. As a result, Alibaba’s share price jumped by almost 10% on Monday and closed the gap left by last week’s dip.
    However, even though the stock is immensely undervalued, worries and uncertainty will likely remain to weigh on the sentiment. Current support is hanging around $110, all the way back to September 2016, the next support will be further down to $95.
    On top of current levels is the resistance line around $139, which if broken could see the stock jump back on the 50 days moving average to fill the gap between $144 and $151.

    Source: TradingView
    Hebe Chen | Market Analyst, Australia
    08 December 2021
  3. ArvinIG
    The European Central Bank is coming under increasing pressure to raise its base interest rate, amid surging inflation and a fast-moving German political landscape.

    Source: Bloomberg   Forex Inflation European Central Bank Eurozone Germany Euro   As one half of the EUR/USD major currency pair, the Euro is one of the most important currencies in the world. And right now, 65% of IG clients are long on the market. This might be because an interest rate rise on this side of the Atlantic could be here soon.
    US Federal Reserve Chair Jerome Powell recently commented that the word ‘transitory’ should be ‘retired’ when it comes to inflation. With the US inflation rate hitting 6.2% last month, the Reserve is contemplating tapering the USA’s quantitative easing program at a faster rate. But there’s been little talk yet of an interest rate rise across the pond.
    However, change is afoot across the European Union. Inflation in Germany has hit a multi-decade high. Pressure on the European Central Bank (ECB) to tighten monetary policy, end its seven-year money printing program, and hike rates is rising fast.
    Eurozone inflation
    November figures show that Eurozone has soared to 4.9%, a 0.8 percentage point increase over October. According to Eurostat, this is the highest inflationary rate in Europe since 1997, two years before the introduction of the Euro. This reality echoes the situation facing the US Federal Reserve, where its 6.2% inflation rate is the highest since 1990. The ECB is now under intense pressure to review its ultra-low interest rate policy as the cost of living across the bloc soars to new highs.
    And problematically, the EU's economically weakest nations are being hit disproportionately hard. Estonia’s inflation rose to 8.4%, and Lithuania to 9.3%. This is an issue as citizens in these countries spend a higher proportion of their income on essentials like food, energy, and travel. Energy alone surged 27% across the bloc. And France’s inflation rate rose to 3.4%, its highest in ten years. This is hardly a desirable outcome for President Emmanuel Macron in an election year.
    ECB President Christine Lagarde has maintained that inflation is temporary and will settle down in mid-2022. But with her US counterpart breaking rank, this position may no longer be tenable.

    Source: Bloomberg German inflation hits 6%
    Meanwhile, inflation in Germany rose to 6%, its highest rate since 1992. Inflation is a particularly sensitive topic in the country, where multiple historical financial crises are seared into the public consciousness. The hyperinflation of the Weimar Republic, the 1948 currency reforms, and the fall of the Berlin Wall have all left their mark, leaving Germans more fearful, and perhaps wise to, the damage runaway inflation can wreak on their country.
    Last month, Lagarde was branded ‘Ms Chanel’ over her spending on designer jackets, while ordinary Germans feel the economic pain under her financial stewardship. She had told the Frankfurter Allgemeine Zeitung newspaper that raising interest rates to counter ‘the current high level of inflation’ would be ‘wrong.’ As the effect of a rate rise would take 18 months to be felt, she believes that a hike would cause economic pain to deal with a problem that may yet prove to be temporary.
    And in a interview with German public service broadcaster ZDF, ECB member Isabel Schnabel said that that ‘November will prove to be the peak,’ for inflation, and ‘there is no evidence to suggest that inflation is spiralling out of control.’ But if inflation continues to rise, the ECB may soon start to lose credibility.
    This delicate economic balancing act also features a fast-changing political situation. The German Centre for European Economic Research has published a paper saying that ECB bankers from indebted EU states are using quantitative easing to bail out their insolvent governments. Meanwhile, the soaring cost of housing saw 56% of Berliners vote to expropriate 240,000 apartments from corporate landlords and return them to social housing.
    And after 16 years of power, Chancellor Angela Merkel is being replaced by a disjointed coalition of the Social Democrats, the Greens and the Free Democrats under Olaf Scholz. Climate protection is a major component of their coalition deal, in a country where coal is still the primary source of electricity.
    If the ECB decides to raise the base rate, the Euro will strengthen. But until then, volatility is all but guaranteed.
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    Charles Archer | Financial Writer, London
    08 December 2021
  4. ArvinIG
    The DocuSign share price collapsed 40% on Friday, losing much of the ground it gained during the pandemic. As companies worldwide grapple with the novelty of hybrid working patterns, DocuSign's future is far from certain.

    Source: Bloomberg   Indices Shares DocuSign Price Telecommuting Share price   At its IPO on 26 April 2018, DocuSign (NASDAQ: DOCU) was initially priced at $29 per share. It raised $629 million, valuing the company at $4.4 billion. By 3 September 2021, the DocuSign share price hit a high of $310, a tenfold return for initial investors.
    Like most stocks with such high returns, a good portion of this success was down to luck. When the pandemic began in early 2020, the NASDAQ Composite index lost almost 3,000 points in the space of a month. Meanwhile, DocuSign was barely affected, instead rising to $264 by 19 February 2021, as globally enforced remote working massively increased demand for its online agreements and eSignature services.
    But it has been volatile over the past two years. It fell to $186 by 14 May 2021, before rising back to its $310 high. It’s been falling since, losing $50 even before Q3 results were reported last week. Then on Friday, the DocuSign (NASDAQ: DOCU) share price collapsed over 40%, as investors deserted the stock over weakened growth prospects. It fell from $232 to $137, erasing much of its pandemic gains.
    DocuSign share price: Q3 results
    At first glance, results were robust for the technology stock. Revenue rose 42% year-over-year to $545.5 million, with most of this income derived from subscriptions. Meanwhile, billings were up to $565.2 million, a 28% increase year-over-year. GAAP gross margin increased by five percentage points, from 74% to 79% since the same quarter last year. And free cash flow rose to $90 million, while cash and cash equivalents were $908.2 million by the end of the quarter.
    CEO Dan Springer commented that ‘third quarter revenue growth of 42% year-over-year and operating margin of 22% exceeded our expectations.’ He further believes that with ‘1.11 million customers worldwide, we are confident in the value DocuSign delivers in an increasingly digital anywhere economy.’
    However, amongst this optimism, investors latched on to one sentence in his statement, that ‘after six quarters of accelerated growth, we saw customers return to more normalized buying patterns.’ The company predicts that Q4 revenue will be between $557 million and $563 million, while Refinitiv data shows an average analyst expectation of $573.8 million. In an earnings call with investors, Springer said that ‘the environment shifted more quickly than we anticipated.’

    Source: Bloomberg Hybrid model?
    It appears that even if the Omicron variant causes further pressure to continue with remote working, DocuSign’s pandemic-driven hypergrowth may be over. In an investor note, JPMorgan analyst Sterling Auty said that ‘pandemic tailwinds came to a much faster than expected halt for DocuSign, catching the company off guard.’
    But in an interview with CNBC, Springer said that the share price fall was an ‘overly strong reaction.’ However, he admitted that ‘we got to a place over the last year, year and a half where we were sort of fulfilling demand,’ rather than generating new demand.
    DocuSign’s valuation was built on expectations for continued high growth. Now that the stock appears to be moving into a consolidation stage, it's possible that the share price fall has simply returned the stock to its fair value.
    But Google has just pushed back an employee return to the office, saying that it needs to come up with a plan to develop a ‘stable, long-term working environment.’ However, Morgan Stanley Managing Director Chris O’Deir called young workers ‘nuts’ for not wanting to ‘be in the office all the time.’ With many employees prepared to resign over remote working conditions, it will take some time to determine whether remote working, a return to the office, or a hybrid model becomes the norm. If the remote working phenomenon continues beyond the pandemic, demand for DocuSign’s services is likely to increase. But a strong 'back-to-the-office' push could see a further share price fall.
    It’s worth noting that the NASDAQ composite as a whole fell by 344 points on Friday. Some of DocuSign’s fall can be ascribed to wider worries over a potential Federal Reserve interest rate hike, the Omicron variant, and fears over a potential market correction.
    But like fellow tech stock Zoom, DocuSign’s share price is going to be determined by the working patterns of the future. And unfortunately for investors, this variable is outside of its control.
    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
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    Charles Archer | Financial Writer, London
    07 December 2021
  5. ArvinIG
    The FTSE 100 is up over 8% this year, and has almost recovered from the pandemic-induced mini-crash of March 2020. However, the Omicron variant is causing uncertainty over the index's direction next year.

    Source: Bloomberg   Indices Shares FTSE 100 Investor Price Stock   On 11 November, the entire FTSE 100 was worth 7,384 points, up 12.3% since the start of the year. But over the past month, the index has slipped to 7,122 points, as fears over the Omicron variant and potential interest rate rises have hit investors' nerves.
    Last year, the FTSE 100 collapsed 30% in the space of a month, from 7,404 points on 21 February, to 5,191 points on 20 March. Having now recovered much of this ground, investors now want to know where the index will go heading into an uncertain 2022.
    Some investors will continue to follow a FTSE 100 tracker fund. Warren Buffet is a great proponent of index investing, saying in this year’s Berkshire Hathaway meeting that ‘here’s a great argument for index funds.’ And plenty of investors who pick individual stocks do worse than the index average.
    But the situation right now is special. Either the Omicron variant sends the UK back into a healthcare crisis, or the economic recovery continues apace. And the outlook for individual FTSE 100 stocks is very different in these two scenarios, which is likely to tempt investors to try to beat the market.
    Of course, having risen so quickly over the past year, the index may simply reverse to the mean. 2022 could even be a year of relative stability.
    FTSE 100 boom stocks
    Travel stocks Rolls-Royce and IAG (British Airways and Iberia owner) are two strong candidates to boom if the economic recovery strengthens. At 132p, IAG is 71% below its pre-pandemic share price of 457p it was worth on 17 January 2020, while Rolls-Royce at 125p, is 89% below its 5-year high of 1,088p. And IAG is expecting a €3 billion loss this year, while Rolls-Royce is continuing with a £2 billion disposal program. Meanwhile, the Business Travel Association has described the requirement for expensive pre-departure PCR testing as a ‘hammer blow’ to the industry. But if restrictions are loosened soon, pent up demand for international travel could see both rocket in the new year.
    Lloyds could also boom if the economic recovery strengthens. It recently posted a £2 billion Q3 profit, almost double compared to the same quarter last year. A continued recovery should come with increased inflation, so the Bank of England will be more likely to raise the base interest rate. As the UK’s largest mortgage lender, its profits would soar on increased mortgage payments. And a rate rise would increase its profits more sharply than its competitors, as it has no international operations.
    Of course, rates may take some time to rise. MPC member Michael Saunders said on Friday that there are ‘particular advantages in waiting to see more evidence on (Omicron’s) possible effects on public health outcomes and hence on the economy… continued delay also could be costly.’
    The fates of both Persimmon and Rightmove are also tied to the housing market. Persimmon delivered 10% more completions in 2021 than in 2020 and is currently paying out an 8.9% dividend yield. With the housing market red-hot, a small interest rate rise is unlikely to dent demand for the housebuilder’s property. Rightmove is the UK’s largest property portal and has extremely low operating costs due to its online nature. And at 738p, it’s up 18.8% in the past year.
    Hospitality stocks Compass Group, Whitbread, and Diageo are also stocks to watch. All three are significantly below their pre-pandemic highs, as demand for hotels, catering and alcohol is tied up with consumer confidence. But if the UK turns a corner over the winter, a hospitality resurgence becomes likely.
    Then there’s oil stocks BP and Shell. Both are recording record profits as the price of oil and gas continues to hit multi-year highs. For climate-conscious investors, they’re also investing heavily in green energy. Brent Crude is predicted to rise even further in 2022, which will deliver even more profits for shareholders — but oil prices can be unpredictable, in 2020, even hitting negative territory, as demand slumped in lockdown. And this could happen again

    Source: Bloomberg FTSE 100 defensive stocks
    Of course, there’s a pessimistic possibility that the pandemic is about to get worse. If the Omicron variant can evade the protection afforded by the vaccine roll-out to a sufficient degree, then very different FTSE 100 sectors will benefit.
    Healthcare stocks Reckitt Benckiser and AstraZeneca are two good examples. Reckitt Benckiser’s share price is up 2.5% in the past month, as demand for its Nurofen and Strepsils brands rises over the winter. Meanwhile, as the manufacturer of the UK’s home-grown vaccine effort, AstraZeneca’s share price would likely rise on international orders of vaccine booster jabs.
    Tesco is also a stock to watch if the pandemic surges. At 280p, its share price has soared 30% since March. And with a 27% market share, it’s the UK’s grocery market leader. The lockdown era saw its online offering soar, and a return to lockdowns could see revenues rise strongly again. Moreover, the supermarket giant is also a potential private equity buyout target after Morrisons was snapped up earlier this year.
    Vodafone and BT are also stocks to watch in a downturn. Vodafone is already seeking to profit from the EU’s €750 billion recovery fund and is seeing strong growth of its M-PESA Fintech venture in Africa. Meanwhile, BT has just signed on experienced new Chairman Adam Crozier, and the reintroduction of dividends and expansion of its Openreach network could both send the stock higher next year.
    Mining stocks have also historically done well during economic downturns. While the likes of Rio Tinto, Evraz, and Anglo American might all be smart choices, one to watch is Glencore, due to having one foot in oil and the other in the mining industry. Gold and silver miner Polymetal International is also a stock to watch. While its share price is down 26% year-to-date, this is largely down to the falling gold spot price. In recessions, demand for gold and silver rises, and Polymetal’s share price could rise with it. Of course, if the economy rebounds, demand for precious metals will continue to fall.
    Finally, British American Tobacco is also a popular choice as a defensive stock. It’s been one of the highest yielding stocks on the FTSE 100 for years, as the addictive nature of nicotine means that demand for its products stays stable regardless of the economic situation. While tobacco use is falling globally, it owns six out of 10 most valuable tobacco brands. Of course, there’s an ethical factor when it comes to investing, and some may be uncomfortable including the stock in their portfolios.
    Whether there’s a boom, a crash, or a period of calm in 2022, there will be winners and losers. Omicron or another variable could blow the FTSE 100 off course in 2022. Or the recovery could strengthen significantly. But wherever clients decide to put their money, there’s plenty of choices at IG.
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    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    06 December 2021
  6. ArvinIG
    The US jobs report looks set for a strong November, with elevated ISM manufacturing and ADP payrolls surveys hinting at another positive month.

    Source: Bloomberg   Indices Unemployment Employment United States Monetary policy Federal Reserve   The November US jobs report is due to be released at 1.30pm, on Friday 3 December (UK time). Coming at a time where markets are struggling to gauge exactly which direction things are heading, this forthcoming jobs report looks likely to remind the Federal Reserve (Fed) of the potential for a faster pace of monetary tightening if the Omicron variant proves to be a false alarm.
    Undoubtedly, the new Covid-19 variant brings huge economic uncertainty, with the monetary policy picture also likely to depend on whether Omicron leads to stringent lockdown measures and another bout of business closures. In which case, the prospect of sharp market declines and economic struggles will make it difficult for the Fed to continue on a path of monetary tightening despite elevated prices. Nonetheless, with some reports that this latest variant could have less severe symptoms compared with Delta, there is a potential for the economic impact to be less severe. Should that come to fruition, high inflation and strong employment would form the platform to ramp up tapering and drive interest rates higher.
    One thing we have seen of late is that the vacancies have rocketed to record levels, allaying any fears that have emerged around volatile payrolls numbers. The chart below highlights how businesses remain committed to hiring new employees, which signals unemployment as largely a misalignment of jobseekers and employers. The ratio between job seekers and job openings are back to pre-pandemic levels, negating much of the fear around any payrolls volatility.
     

    Source: Refinitiv Taking a look at the latest ‘Conference board’ survey, we can see that the ratio between individuals finding employment “hard to find” compared with ‘plentiful’ continued to decline,. That took the ratio into a fresh record lows, highlighting the positive jobs picture in the US.

    Source: Refinitiv With government benefits having finally dropped off, there is little incentive to hold off on finding a job if unemployed. That could help drive the jobless into roles, which may not have been the case previously. As such, it would make sense that we could see strong downside for the unemployment this time around. Last month saw unemployment fall more than expected, and we could see something similar on Friday.

    Source: Refinitiv What do other employment surveys tell us?
    It is often useful to look out for clues within alternate employment readings, with the ADP, jobless claims, and Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) all worth analysing ahead of the main event.
    ADP payrolls
    Wednesday’s ADP payrolls figure for November came in at 534,000, which stook slightly below the October reading of 570,000. While some refute the relationship between the ADP and headline payrolls readings, they can often provide a good general direction of travel. With that in mind, the fact that we have seen another ADP reading over 500,000 does support the notion that payrolls will post another strong number on Friday.
     

    Source: Refinitiv Initial jobless claims
    Initial claims saw another sharp move lower last month, with the indicator falling back into pre-pandemic levels. This provides greater confidence that we are not on experiencing a jobs market shock that could impact the payrolls figure.
     

    Source: Refinitiv Continuing jobless claims
    Continuing claims provides us with a good proxy for unemployment, with the latest surveys supporting the idea that unemployment will head lower on Friday.
     

    Source: Refinitiv  
    ISM manufacturing PMI
    The latest ISM manufacturing PMI saw another improved reading for the employment element. With the employment PMI figure rising to a seven-month high of 53.3, it is clear that the manufacturing sector is enjoying continued improvements in November. Unfortunately, the services sector ISM PMI is not released until Friday afternoon.
     

    Source: Refinitiv  
    Non-farm payrolls
    Last month saw a welcome boost for the headline payrolls figure, with a reading of 531,000 representing the highest figure in three-months. Notably, the services sector accounted for much of that October rebound. On this occasion, markets are expecting a figure around 550,000.
     

    Source: Refinitiv  
    Unemployment
    From an unemployment perspective, the downward trajectory remains in place after a welcome drop down to 4.6% last month. As we have seen, both the continuing claims, and the conference board ratio, signal the potential for further downside to come. Elevated job openings coupled with a drop off in government benefits provide the environment where further reductions in unemployment look highly likely.
    As things stand, U-3 unemployment (headline) is expected to decline to 4.5%. However, with a low participation rate, it also makes sense to keep an eye out for the wider U-6 measure of unemployment which provides a more comprehensive gauge accounting for many that would have dropped out of the headline reading.
     

    Source: Refinitiv  
    Wages
    US earnings remain elevated, providing further ground for higher inflation. The annual average earnings figure stands at 4.9%, but the elevated level of vacancies do support further upside. Markets are expecting a figure of 5%.
     

    Source: Refinitiv  
    Dollar index technical analysis
    The dollar index has been hit hard after a repricing of expectations for tighter monetary policy. Until we know the true economic repercussions from this latest Covid-19 variant, we are likely to see traders second guess the Fed outlook going forward.
    A strong jobs report could help build the case for tighter monetary policy, but always remember that the Omicron updates will play the dominant role in dictating markets over the coming weeks. Near-term support comes in the form of the 95.47 swing low, which if broken would lead to a wider retracement of the 92.23 to 96.88 rally. Nonetheless, the wider uptrend does remain intact, with the bulls likely to come back in a meaningful way should Omicron fears turn out to be overblown.
     

    Source: ProRealTime DJIA technical analysis
    The Dow Jones has also been under pressure of late, with traders caught between the potential for monetary tightening or Covid-19 restrictions.
    We do still remain within an uptrend despite the price having slipped back into the 200-day simple moving average (SMA). This points towards a heightened risk of a wider reversal for index in the event that price falls below 3353. Until then, the uptrend does still remain intact.
     

    Source: ProRealTime

    Joshua Mahony | Senior Market Analyst, London
    03 December 2021
  7. ArvinIG
    The Omicron variant saw the FTSE 100 sink 3.6% last Friday. After rallying this week, SAGE and Moderna are sounding the alarm. Could Prime Minister Boris Johnson be forced to cancel Christmas once more?

    Source: Bloomberg   Indices FTSE 100 Christmas Investor Volatility Stock market index   FTSE 100 investors who are feeling a strange sense of déjà vu are not alone.
    On 16 December 2020, PM Boris Johnson took to a podium and exclaimed it would be ‘frankly inhuman’ to cancel Christmas. Three days later, millions of people were placed into a ‘Tier 4’ lockdown over twin discoveries of the UK-discovered Alpha variant and South Africa-found Beta variant. After Christmas, the government insisted that children return to school for the Spring term, before u-turning hours later.
    Fast-forward one year, and the Prime Minister takes to an eerily similar podium to announce that this Christmas will be ‘considerably better than the last.’ When asked about Christmas socialising and school Nativity plays, he posits that ‘we don’t want people to cancel such events. We think that overwhelmingly the best thing for kids is to be in school.’
    Moreover, he believes that wearing masks on public transport and in shops is enough to deal with the Omicron variant. However, Chief Executive of the UK Health Security Agency, Jenny Harries, believes ‘not socialising when we don’t need to’ is key to keeping it under control.
    Sage and Moderna weigh in
    Today, a leak from the Scientific Advisory Group for Emergencies (SAGE) called the impact of the Omicron variant ‘highly uncertain,’ saying it may require a ‘very stringent response.’ The group thinks the government should prepare for a ‘potentially significant’ new wave of infections, leading to a ‘potentially high number of hospitalisations.’
    Worryingly, SAGE has confirmed that it is ‘highly likely’ Omicron can escape the immunity caused by previous vaccinations or infections ‘to some extent.’
    And yesterday, Moderna CEO Stéphane Bancel said that ‘it is highly possible that the efficacy of the vaccine, all of them, is going down.’ Pfizer CEO Albert Bourla has said it will take 95 days to tweak current vaccines. In addition, the European Medicines Agency director Emer Cooke said it would take three to four months for any new vaccine to be approved.
    Johnson will be ‘throwing everything’ at his campaign to have every adult given a booster jab by the end of January. But this may not be the Christmas-saving silver bullet he thinks it is. And with 22 cases already discovered in the UK, it may already be too late.

    Source: Bloomberg Is Christmas cancelled for the FTSE 100?
    On 1 December 2020, the FTSE 100 was at 6,385 points, and rose 7.6% to 6,873 by 8 January 2021. By the end of January, it had settled back to 6,407 points.
    But the story this year could be different. When word of the Omicron variant hit the FTSE 100 on 24 November, it fell 3.6% to 7,044 points, its biggest one day drop since March 2020. But as I write, the index is up 1.2% to 7,147 points. However, it still has some ground to recover.
    Stocks that were hit hardest last week have led the recovery. Travel stock IAG is up 4.7% today to 133p, while aircraft engine builder Rolls-Royce is up 1.5% to 124p.
    Hospitality stock Whitbread (owner of Premier Inn and Beefeater) is the FTSE 100’s top riser today, up 4.7% to 2,935p. Contract foodservice giant Compass Group is up 3.15% to 1,509p, while InterContinental Hotels Group is up 2.9% to 4,576p.
    BP has risen 3.4% to 336p, and Shell 2.9% to 1,623p, as the price of Brent Crude recovered to around $72 per barrel. And the big four banks — HSBC, Barclays, Lloyds and NatWest — are all up around 2% as fears of the variant recede and an interest rate is put back on the table.
    With a new lockdown less likely, online grocer Ocado is the top faller, sinking 3.4% to 1,735p. Meanwhile, vaccine chemical manufacturer Croda International is down 1.8% to 9,936p.
    The uncertainty caused by the Omicron variant will see these pandemic-affected FTSE 100 stocks remain volatile for some time to come. The NERVTAG advisory group just announced Omicron could overwhelm the NHS, saying that it 'could be capable of initiating a new wave of infections of a magnitude similar, or even larger than previous waves.' Every update seems to send the index swinging.
    As for Christmas, we’ll have to wait and see.
    For investors with an appetite for risk, IG offers FTSE 100 futures to trade on the ongoing market volatility.
    Trade what you want, when you want with the UK’s No.1 trading provider.* We have over 80 top global indices with more trading hours than anyone else. Find out more about indices trading or open an account to trade now.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    02 December 2021
  8. ArvinIG
    Australia's Reserve Bank is continuing with quantitative easing and rock-bottom interest rates, while New Zealand is tightening up fiscal policy. With house prices skyrocketing in both countries, what could happen to AUD/NZD?

    Source: Bloomberg   Forex Inflation Australian dollar Australia Real estate economics Interest   There’s a chasm between Australia’s and New Zealand’s economic policies right now. Currently, 67% of IG clients are long on the AUD/NZD pair, with 1 AUD currently buying 1.05 NZD. But there’s no guarantee that the Australian dollar will strengthen anytime soon.
    AUD: rising inflation
    In November’s Statement of Monetary Policy, the Reserve Bank of Australia said that the ‘latest data and forecasts do not warrant an increase in the cash rate in 2022,’ instead forecasting that ‘an increase in the cash rate in 2023 could be warranted,’ if inflation and wage growth are ‘materially higher than they are at present.’ Moreover, it will continue to purchase government bonds until at least February 2022, at a pace of $4 billion a week. It’s already bought up $315 billion of bonds since March 2020.
    The report continued that ‘about two-thirds of the quarterly increase in the Consumer Price Index (CPI) was accounted for by sharp rises in two components: fuel prices and home-building costs.’ Increased construction costs were partially blamed on global material price increases — for example, timber is up 64% since July 2020 — but it also blamed demand created by the government’s Homebuilder subsidy.
    Accoring to CoreLogic, average house prices are up 18.4% in the year to September to $994,579, with prices rising by more than 30% in 45 regional areas. But because GDP shrank by 3% in September, Reserve Bank Governor Philip Lowe has said there is a ‘very low probability’ that rates will rise as it could stifle the economy further.
    As a result, the average mortgage rate is about 2.3% – 0.7 percentage points below inflation, which is likely to continue to rise. The Commonwealth Bank of Australia has predicted an 8% house price rise in 2022, before a 10% fall the year after. A forced rate rise at the wrong time could spell disaster for Australia’s housing market, AUD, and its economy as a whole.

    Source: Bloomberg New Zealand: rising interest rates
    Figures from the Real Estate Institute show that average house prices rose 31% over the year to July, to a record $937,000. Back in March, PM Jacinda Arden brought in new measures to cool the market, saying that ‘the last thing our economy and homeowners need is a dangerous housing bubble.’
    The income cap on government-backed First Home Grants was lifted from $85,000 to $95,000 for single buyers, and from $130,000 to $150,000 for couples. The holding time for investment properties to qualify for tax offsets was raised from five to 10 years, and investors were banned from offsetting interest expenses against rental income. Finance Minister Grant Robertson said that ‘we cannot afford to put the current economic recovery at risk by allowing house prices to spiral out of control,’ and announced $3.8 billion to speed up new build construction.
    And like its brother across the Tasman sea the Reserve Bank of New Zealand has also bought $53.5 billion of government bonds. However, unlike Australia, it ended the program on 23 July.
    But house prices continued to skyrocket. As inflation hit 4.9% in November, New Zealand's Reserve Bank raised the base interest rate to 0.75%, its second hike in as many months. It expects rates to rise to 2% by the end of 2023, with further increases possible in 2024. Eventually, it hopes the rising cost of monthly mortgage repayments will bring house prices back down.
    New Zealand has raised its base rate and stopped buying government bonds. Australia is continuing with its quantitative easing program and keeping its rate at rock-bottom. New Zealand might see its economic recovery falter, while Australia risks fuelling inflation and a housing market collapse.
    Meanwhile, the Evergrande threat from China still looms large. With £223 billion of debt, the potential collapse of the mammoth real estate developer could hit both Australia and New Zealand with destructive third-order contagion. 30% of China’s GDP is related to the housing market but average prices in the country fell 0.2% in October.
    The long-term impact on AUD/NZD depends on which domino falls first.
    Trade 100+ FX pairs with the UK’s No. 1 retail forex provider.* Enjoy fast execution, low spreads – plus we’ll never fill your order at a worse price. Learn more about our forex trading platform or create an account to start trading today.
    Charles Archer | Financial Writer, London
    01 December 2021
  9. ArvinIG
    The Ocado share price has risen 6% since Friday, as news of the Omicron variant caused the FTSE 100 to fall nearly 4%. Ocado shareholders could see their investment surge if lockdowns are reintroduced.

      Source: Bloomberg   Indices Shares Ocado Group Marks & Spencer Revenue Investor The Ocado (LON: OCDO) share price rose 5% on Friday to 1,830p by close. Today, it’s still rising, up a further 1% to 1,845p as I write. And it’s up 2% over the past month.
    In the medium term, the online grocer’s stock has performed less well. It struck a 2021-high of 2,808p on 5 February, and has since lost 34% of its value. But long-term investors have seen significant returns. On 24 November 2017, it was 239p, and even accounting for its decline this year, Ocado is still up 672% in just over four years.
    News of the Omicron variant last week saw the FTSE 100 fall almost 4%, with Ocado one of the few winners. Some investors believe that a potential return to lockdowns could send its revenue growth soaring. Others, having missed out on 2020’s rally may now see an opportunity. On 28 February 2020, Ocado was worth 1,064p per share, before rising to a record high of 2,819p by 25 September 2020. Some may even be buying the stock as a hedge for their portfolios.
    Ocado share price: Q3 FY21 results
    Q4 results are due on 14 December, but recent figures can be found in Q3 results, that span the 13 weeks to 29 August. The headline was revenue falling 10.6% year-on-year from £578.8 million to £517.5 million.
    However, the retailer said it was a ‘period best looked at as two distinct halves; before and after the fire at the Erith Customer Fulfilment Centre on July 16th.’ Until the fire, revenue was only down 1.8%, and customer orders had increased by 22%. Moreover, the lockdown era saw Q3 2020 revenue soar 58% compared to Q3 2019. For context, the most recent quarter’s earnings were up 38% compared to Q3 2019.
    But revenue fell 19% during the seven weeks after the fire, with the company estimating that it lost around 300,000 orders worth £35 million. After insurance, the net cost of the fire was £10 million. It’s possible that the negative share price movement since has been caused by a lack of investor comprehension that this is a one-off cost. In addition, Ocado added 64,000 customers bringing its total to a record 805,000.
    Chairman Tim Steiner believes that ‘Ocado Retail will continue to grow market share…with our long-term outlook as compelling as ever.’

    Source: Bloomberg Marks and Spencer buyout?
    CEO Melanie Smith spoke highly of the one-year anniversary of their partnership with Marks & Spencer whose share price is up 68% to 240p since 19 August. She highlighted that M & S goods ‘now represent 29% of the (Ocado) basket.’
    Marks & Spencer owns 50% of Ocado since spending £750 million on the stake in 2019. The tie-up was recently covered by Deutsche Bank analyst Adam Cochrane, who said that ‘it makes strategic sense’ for M & S to purchase the remaining 50%, adding it would be a ‘big step up’ for its online strategy. While there are some regulatory issues, a full takeover bid would likely see Ocado’s share price rise.
    But Ocado is facing the same pressures as its competitors. The labour shortage is forcing it to increase wages, with ‘rising costs of labour, particularly for LGV and delivery drivers…may result in up to £5m of impact to full year numbers.’ In fact, Steiner recently called on the government to add lorry drivers to its skilled shortage list, saying that it is an ‘increasingly important issue for the industry.’ Supply chain pressures are also creating stock issues, while price inflation could be hurting sales of its premium Marks and Spencer lines.
    But unlike other UK supermarkets, Ocado doesn’t have physical stores. Instead, it uses robots to pick and pack online orders in specialised warehouses. Therefore, it’s unlikely be as badly affected by the labour shortage, with Smith is expecting a ‘bumper Christmas.’
    And if Christmas does go well, or Marks & Spencer attempts a buyout, Ocado shares could soar. More clues for Ocado's future share price trajectory will be found in December’s Q4 earnings.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    30 November 2021
  10. ArvinIG

    How far could Lucid shares soar after Q3 results?

    By ArvinIG,


    Analyst Article
    The Lucid share price hit a high of $55 last Friday, after reporting encouraging Q3 results. Its first car, the Lucid Air, just won ‘MotorTrend Car of the Year,’ and production is starting to ramp up.

    Source: Bloomberg   Shares Car Electric vehicle Tesla, Inc. Rivian Investor   The Lucid (NASDAQ: LCID) share price is at $52 right now, after dropping back slightly from its high of $55 last week. The stock only went public through a SPAC deal in July 2020, yet investor interest is running at fever pitch. And this optimism for Lucid may be well placed.
    MotorTrend Car of the Year
    The company’s flagship $144,000 Lucid Air model recently won the 2022 ‘MotorTrend Car of the Year.’ It’s the first time a company has won the award with their first car. It was praised for its efficiency and range — two metrics that have historically kept owners of traditional Internal Combustion Engine (ICE) vehicles from switching.
    The Dream R edition achieves 520 miles of range on a single charge. For perspective, that’s enough range to drive from London to York, and back, with almost 100 miles to spare. The US Environmental Protection Agency (EPA) has certified it as the longest-range car in the USA, with MotorTrend hailing it as ‘the new benchmark.’ And more affordable versions will be coming on to the market next year.
    CEO Peter Rawlinson previously worked at Tesla and helped engineer the Model S, which won the award back in 2012. It’s possible that investors are envisioning a scenario where Lucid’s share price grows as rapidly as Tesla’s over the next few years. In 2012, Tesla traded for around $6 a share, and has since risen an eyewatering 18,500% to $1,116. Replicating even a small fraction of this success would delight Lucid shareholders.

    Source: Bloomberg Lucid share price: Q3 results
    In Q3 results, the start-up revealed that customer car reservations had risen to 13,000, worth $1.3 billion. Reservations have since increased to 17,000. In addition, Lucid ended the quarter with $4.8 billion in cash, which it will use to fuel expansion.
    Unlike rival Rivian, production has started in its Advanced Manufacturing Plant (AMP) in Arizona, with the capacity to build 34,000 vehicles per year. However, it’s expanding the space by 2.85 million feet to increase production to 90,000 per year by the end of 2023.
    Rawlinson said that he was proud of beginning ‘production of vehicles for customer deliveries, continued investing in capacity expansion…and new retail and service locations in advance of the Lucid Air launch.’ Looking ahead he expects ‘significant demand…confident in our ability to achieve 20,000 units in 2022.’ But he acknowledged the ‘challenges facing the automotive industry, with global disruptions to supply chains and logistics.’ A key concern going forward will be the microchip shortage, as electric vehicles use more than twice as many as oil-powered cars.
    Moreover, Lucid has significantly more competition than Tesla faced back in 2012. In addition to Elon Musk’s trillion-dollar company, it will also be competing against US rivals like Amazon and Ford backed Rivian, Chinese rivals such as NYSE-listed NIO and XPeng, and legacy manufacturers like General Motors and Toyota, who are both investing heavily in the EV revolution.
    Some perspective is important too. In their 2020 financial year, Toyota sold around 9 million ICE cars, far surpassing global EV sales. Tesla has delivered more than 600,000 electric cars so far this year. Even Rivian, which has barely started production, has a current build capacity of 150,000 per year compared to Lucid’s 34,000.
    And Rivian’s share price has fallen by 33%, from a high of $172 on 16 November to $115 today. With Lucid’s share price spiking, it’s likely that short-term investors will attempt to make a quick profit off its volatility, which makes a fair share price difficult to discern. But it’s also possible that investors are selling some Rivian stock to buy Lucid, simply to reduce their risk by diversifying their portfolios.

    The Lucid share price could continue to soar. It’s created a strong product, with clear consumer demand. However, it’ll be facing stiff competition from better established competitors. Early Tesla investors may have faced a similar conundrum.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    26 November 2021
  11. ArvinIG
    The Royal Mail share price is rising fast after delivering strong results last week. It's returning £400 million to investors in dividends and share buybacks. And with vastly improved infrastructure, it could rise further.

    Source: Bloomberg   Shares Royal Mail Mail Share repurchase Cash Dividend   The Royal Mail (LON: RMG) share price is up 10% since releasing encouraging H1 2021/22 results on 18 November. Since then, it’s also announced it will be returning £400 million to investors. £200 million will be paid out as special dividends, with the other £200 million spent on share buybacks.
    And at 504p right now, Royal Mail shares are up 21% in the past month, and 70% since this time last year. But they’re still 127p off their five-year high of 631p that they hit on 11 May 2018. And with Christmas deliveries about to soar, it could rise even further.
    Royal Mail share price: H1 2021/22 results
    Revenue rose 7.1% from £5.671 billion to £6.072 billion year-over-year. On adjusted measures, operating profit hit £404 million, while operating margin rose from 0.7% to 6.7%. Meanwhile, net debt was nearly cut in half, from just over £1 billion to £540 million. Net cash rose from £47 million to £685 million, while its in-year trading cash flow of £298 million has risen by 36.1%. Clearly, this is all excellent news for shareholders.
    CEO Simon Thompson said that ‘pandemic has resulted in a structural shift and accelerated the trends we have been seeing.’ He highlighted the move away from letter delivery to parcels in the wake of the Covid-19 pandemic, with Royal Mail domestic parcel volumes increasing by 33% and GLS by 30%. Meanwhile, letter deliveries only rose by 11%, and are still significantly lower than pre-pandemic levels.
    Chairman Keith Williams commented that ‘both Royal Mail and GLS will be able to fund their respective investment pipelines from future cash flows and continue to invest in growth, technology, digital services and the environment.’

    Source: Bloomberg Special dividend
    Williams continued ‘we will return £400 million of cash to shareholders, partly through a share buyback and partly from a special dividend.’ Moreover, the group is returning this money as it believes that it can continue to grow based solely on current cash flow. And after a restructure, the group has saved £56 million in management costs.
    And it continues to drive technological innovation and dispose of weaker legacy systems. Last Christmas, the service was unable to cope with the extra demand for parcel delivery while physical shops were kept locked down. This spurrred it to spend hundreds of millions of pounds on upgrades. This worried some investors, who were concerned about the high price tag. But now that the investment is paying off, it’s no wonder the Royal Mail share price is rising. And with the trend to online continuing, Royal Mail is likely to benefit from continually increasing demand for parcel deliveries.
    However, Royal Mail does face challenges. The labour shortage is going to make it harder to hire seasonal workers during the crucial Christmas trading period. And with competitors like Amazon offering significant bonuses to new staff, it might find its wage bill beginning to inflate.
    In addition, it has struggled in the past with balancing its commitment to universal delivery with profitability. Thompson said that ‘our strategy to rebalance our offering more towards parcels is the right one, and demonstrates the need to start defining what a sustainable Universal Service is for the future.’ It’s likely that agreeing this definition between shareholders, the government and Royal Mail’s board is going to be difficult.
    In addition, it faces increasingly stiff competition in urban centres from the likes of Hermes, DPD, and Yodel who can operate with lower margins without being beholden to universal delivery.
    Whether the Royal Mail share price continues to surge back to its valuation levels of 2018 is going to depend on it increasing parcel deliveries further. Having already spent the initial outlay, there could be more special dividends in the future. But its competition is likely to become fiercer as well.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    24 November 2021
  12. ArvinIG
    The Metro Bank share price has fallen 95% since the beginning of 2019. After private equity giant Carlyle pulled out of a takeover proposal last week, what are its prospects for 2022?

    Source: Bloomberg   Shares Bank Metro Bank (United Kingdom) The Carlyle Group Stock Private equity   At its launch in 2010, Metro Bank (LON: MTRO) was the first UK high street bank to open in over a century. Six years later, its IPO on 10 March 2016 saw the challenger bank’s share price open at 2,200p. And by 28 February 2018, it had soared to its all-time high of 3,952p. But after falling to 2,196p by 18 January 2019, disaster struck for the retail and commercial banking outfit.
    The Prudential Regulation Authority (PRA) discovered that it had misclassified hundreds of millions of pounds of high-risk commercial property and buy-to-let loans. Metro Bank was forced to issue an additional £350 million of shares to meet its capital requirements in case some of its debtors defaulted. Chairman Vernon Hill resigned, and the bank also had to scale back its growth plans.
    By March 2019, it was one of the most shorted shares on the UK market. Some customers were starting to close their accounts and withdraw their deposits. The Metro Bank share price is now down 95% from 2,196p to 101p and has hovered around that level since the market mini-crash of March 2020.
    Carlyle exits takeover plan
    On 4 November the Metro Bank share price rose 29%, from 103p to 133p on the news that private equity giant Carlyle had entered into buyout talks with the struggling challenger bank. But on 17 November, Carlyle informed investors that it had ‘agreed to terminate discussions.’ In response, Metro said that its board ‘strongly believe in the standalone strategy and future prospects.’ The bank’s share price promptly fell back to its current price of 101p.
    When Carlyle announced the plan, Goodbody analyst John Cronin suggested that it could be a ‘deep value play’ for the private equity group, as a combination of Metro’s repositioning and the prospects of increasing UK interest rates could see profits begin to soar. And as it now appears that a rate rise is almost inevitable, it may leave investors wondering why Carlyle would pull out of the proposed deal.
    However, it may simply be that Metro Bank’s board considered the private equity bid to be too low. Arguably, it could one day return to its former valuation. Or the bank thinks it can secure an improved bid in the near future. But without further information, investors can’t know for sure. And this ongoing uncertainty is another problem for the struggling stock.

    Source: Bloomberg Metro Bank share price: Q3 2021 results
    Last month’s third-quarter results did not impress investors. Total deposits fell again, to £16.412 billion, a 1% drop quarter-over-quarter. Meanwhile, total net loans of £12.315 billion were £200 million less than in Q2. However, this also represents an 18% increase over Q2 2020.
    And CEO Daniel Frumkin remains positive, commenting that ‘the Bank has continued to deliver against its strategic priorities during the quarter. We have seen improvements in our lending mix from our expanded product offering.’
    And H1 2021 results were more encouraging. Adjusted underlying revenue rose 14% compared to H1 2020 and was up 47% year-on-year. Moreover, customer accounts rose 20% from 2.0 million in H2 2020 to 2.4 million, reversing the prior downwards trend.
    But with new online-only competition, including Monzo, Starling, and Wise, Metro Bank's physical presence may prevent it from being the prime challenger it once was. The pandemic has driven more people online than ever before, at the cost of high street foot traffic. Many of its traditional competitors, including Barclays, HSBC, and Lloyds, have all reported record results recently. And they’ve all been closing branches in response to new digital trends.
    A comeback next year for the Metro Bank share price is not impossible. The bank has repositioned its finances, is growing customer accounts, should grow profits when interest rates rise, and is receiving private equity interest. And its low valuation means there’s plenty of room for share price growth. But it’s been a penny stock at times over the past year. And in the face of stiff competition, it could even have further to fall.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    23 November 2021
  13. ArvinIG
    China’s top tech giant Alibaba experienced one of its worst days in US share market. Its share price (NYSE: BABA) dropped harshly by 11% from $161, the day before, to $143 when market closed on Thursday.


    So urce: Blo omberg   Forex Shares Alibaba Group Renminbi E-commerce Investor   Even through a 4.07% drop before the report day showing Alibaba Group Holding Ltd (All Sessions) investors had little expectation for the Chinese ecommerce giant given all the bumpy hurdles that it had gone through, the disappointing Q2 earnings still dragged the BABA’s share price down much further.
    What does the Q2 earnings show?
    Based on Alibaba’s Q2 earnings, the ecommerce giant reported non-GAAP earnings per share (EPS) of $1.74, missing the estimate of $1.93, representing a shocking 37.7% decline compared to the same period last year. Revenue was also reported as a miss, totalling $31.15 billion as opposed to the estimated $32.05 billion.
    Annual active consumer globally is the only beat that has reached approximately 1.24 billion, more than four-times the size of Amazon (300 million), with a quarterly net increase of 62 million consumers.
    Alibaba earnings results
    Metric
    Beat/miss/match
    Reported value
    Analysts prediction
    Adjusted EPS Miss RMB 11.20 RMB 12.11 Revenue Miss RMB 200.7B RMB 205.7B Annual active consumers in China Beat 953 M 846.6 M Source: VisibleAlpha
    Quarterly earnings surprise amoune
    Fiscal quarter end
    Date reported
    Earnings per share
    Consensus EPS forecast
    % Surprise
    September 2021
    18/11/2021
    1.75
    1.93
    -9.3
    June 2021
    8/03/2021
    2.16
    1.74
    24.1
    March 2021
    05/13/2021
    1.1
    1.41
    -22.0
    December 2020
    2/02/2021
    2.98
    2.78
    7.2
    September 2020
    11/05/2020
    1.32
    1.65
    -20.0
    Source: Nasdaq.com
     
    Why is the market disappointing?
    Fundamentally, investors are concerned about the company’s long-term profitability. Although the group’s revenue still grew by 29% year-over-year, its adjusted EBITA margin for the most profitable sector ‘commerce’ decreased from 35% in the quarter ending 30 September 2020 to 19% a year after, shrinking by a worrying 45%. Alibaba didn’t deny thinner margin in the report, stating “we expect that our commerce adjusted EBITA margin will continue to be affected by the pace of our investment in key strategic areas”.
    Actually, Alibaba's operating margin has been declining for some time. In 2014, the company’s margin sat at around 45% when their active user size was only one-fourth of what it is today. This means the ecommerce giant’s margin has been reducing by an average of 12% every year.
    Adjusted EBITA and adjusted EBITA margin by segments (in millions, except percentages)
     
     
    2020
     
    2021
     
    RMB
    Margin
    RMB
    US$
    Margin
    Commerce
    45,958
    35%
    33,270
    5,163
    19%
    Cloud computing(1)
    -567
    -4%
    396
    61
    2%
    Digital media and entertainment
    -710
    -9%
    -931
    -144
    -12%
    Innovation initiatives and others(1)
    -1,970
    -189%
    -2,882
    -447
    -201%
    Source: Alibaba
    On the other hand, Alibaba’s challenge is not just a matter of fundamental valuation, but a matter of risks. As the open window into the impact of Beijing’s regulatory curbs, Alibaba coincided other Chinese stocks listed in the U.S. are reporting similar troubling results this quarter. For example, Tencent last week reported its slowest revenue growth since 2004, fuelled with the growing concern over the company’s long-term picture under the environment that was walloped by macroeconomic and regulatory turmoil.
    Alibaba technical analysis
    Over the past twelve months, Alibaba's shares have provided a total return of -37.1%, well below the US 500's total return of 29.9%.
    From a technical standpoint, the freefall from this week has left a big gap between $146 to $160, which became the critical resistance level if the price is seeking higher in the near term. The candlestick is now sitting in the previous gap from October, with the support level at $139. If the bearish momentum stays, a further down to two-year-low at $130 may be in view.

    Source: TradingView Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
    Hebe Chen | Market Analyst, Australia
    22 November 2021
  14. ArvinIG
    The FTSE 100 lost 1,000 points when the Bank of England increased the base interest rate in 2018. As inflation soars and consumers are hit by a cost-of-living crisis, the blue-chip index could see its recent rally end.

    Source: Bloomberg   Indices Commodities Inflation Interest rate Bank Interest   A common concern for FTSE 100 investors right now is the potential effect of the Bank of England imposing interest rate hikes in the face of rising inflation.
    And there’s a problem with inflation in the UK right now. The government sets the Bank of England’s inflation target at 2%. In simple terms, this means that if your loaf of bread costs £1 today, a year from now it’ll cost £1.02. Or a new car that costs £20,000 now will cost £20,400 next year, and even more the year after. This motivates consumers to spend money, which helps to grow the country’s Gross Domestic Product (GDP).
    How far could inflation rise?
    But if inflation falls below 2%, the incentive to spend also drops off, which can be harmful to the economy. And if inflation rises too far above the 2% target, the cost of essentials like housing, energy and food become so expensive that disposable income is constricted. And this also hurts the economy.
    According to the Office for National Statistics, the Consumer Prices Index rose to 4.2% in October, up from 3.1% in September. Meanwhile, the Bank of England’s Monetary Policy Committee recently decided to maintain the base interest rate at its record low of 0.1%. But pressure is mounting on the nine-member group to begin to steadily increase it, with many analysts expecting it to reach 1% by the end of 2022.
    Worryingly, GDP growth slowed to only 1.3% in the three months to September, leaving it more than 2.1% below its pre-pandemic level in Q4 2019.
    When inflation is running high and the economy is growing strongly, the received wisdom is to raise the base interest rate. If inflation is low, and growth is also slow, then it’s best to lower interest rates. However, the UK (along with the EU and USA) is in a sticky situation where inflation is rising substantially above official targets, while growth is unbendingly slow.
    And this put the Bank of England in a bind. It can either choose to raise interest rates, which could hit asset classes like the FTSE 100 and kill off the green shoots of the UK’s post-pandemic recovery. Or it allows the cost-of-living crisis to escalate even further.
     

    Source: Bloomberg Will the base rate rise in December?
    Due to rising oil prices, petrol is at its highest price since 2012. The cost of energy is soaring, with multiple suppliers going bust due to the price cap. Meanwhile, the UK is missing 100,000 lorry drivers, leaving shop shelves increasingly bare. Moreover, cheaper goods are more likely to be missing on the shelves as transport space is at a premium. And this hits the poorest consumers the hardest. In addition, the supply chain crisis is wreaking havoc on the price of everyday goods, with the lack of microchips for new cars sending the second-hand car market into overdrive.
    Moreover, there are currently 1,172,000 job vacancies in the UK, with an unemployment rate of only 4.3%. In this employee market, employers are being forced to raise wages to attract and retain staff. However, they also must increase prices to pay for these wage increases. And in turn, employees demand even higher wages. This ‘wage-price’ spiral can create a damaging and self-sustaining wave of inflation.
    But taxes are rising soon. National Insurance is going up by 1.25 percentage points next April. Council tax will rise by 5% in most areas. Income tax bands are being frozen until 2026. Corporation tax is increasing to 25% from 19% in 2023. There’s even talk of the student loan repayment threshold for Plan 2 graduates being lowered from £27,295 to as low as £22,000. In theory, this organic limit on income will hit at the same time as inflation is set to peak. This could reduce the need to raise rates significantly higher.
    What could this all mean for the FTSE 100?
    First off, it’s worth bearing in mind the age-old adage: time in the market beats timing the market. After the early 00’s dot-com bubble pop, 2008 credit crunch and 2020 pandemic mini-crash, the FTSE 100 has always recovered. Even if in the past, it’s taken years.
    And rate rises aren’t guaranteed. Forex traders expected the Bank of England to increase the base rate to 0.25% this month. And it declined to do so, arguing that raising rates domestically could do too much damage to the jobs recovery while having little impact on the global supply chain squeeze. But on Monday, Governor Andrew Bailey said he was ‘very uneasy’ about the rising cost of living.
    And on the assumption that rates do rise soon, the impact on the FTSE 100 is likely to be negative. Many companies on the index carry sizeable debt, which would cost more to service. Any new credit would become harder to acquire, and more expensive to pay back, constraining growth. And the last time rates rose, from 0.5% to 0.75% in August 2018, it lost 1,000 points in less than four months.
    At 7,256 points right now, the FTSE 100 has gained 15% in the past year. It only needs to rise an additional 7% to reach its all-time high of 7,749 it struck on 31 July 2018. With the European Central Bank warning of ‘exuberance’ in global asset classes, some investors might consider an interest rate hike as the catalyst for a FTSE 100 dip.
    But if rates do rise, some stocks will benefit more than others. Banks like Lloyds, the UK’s largest mortgage lender, will see profits rise on credit repayments. Mining stocks like Barrick Gold or Glencore should also see rises, as investors seek the relative safety of raw minerals. And energy companies like BP or Shell have also performed well historically.
    A rate rise offers opportunities to forex traders as well. There’s plenty of opportunities for the savvy investor at IG. What do you think will happen next?
    Trade what you want, when you want with the UK’s No.1 trading provider.* We have over 80 top global indices with more trading hours than anyone else. Find out more about indices trading or open an account to trade now.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    20 November 2021
  15. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 22nd November 2021. These are projected dividends and likely to change. IG cannot be held responsible for any changes made.
    Dividends highlighted in red include a special dividend, therefore some or all of the amount will not be adjusted. Amount in brackets is the expected adjustment after special dividends excluded (where shown on major indices). Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day. 
    If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.
     

    NB: All dividend adjustments are forecasts and therefore speculative.
    A dividend adjustment is a cash neutral adjustment on your account.
     
    Special Dividends:
     
    Index
    Bloomberg Code
    Effective Date
    Summary
    Dividend Amount
    RTY
    SSBI US
    23/11/2021
    Special Div
    0.06
    RTY
    MNRL US
    23/11/2021
    Special Div
    0.26
    RTY
    DDS US
    26/11/2021
    Special Div
    15
    RTY
    DHIL US
    26/11/2021
    Special Div
    19
    RTY
    RLI US
    29/11/2021
    Special Div
    2
    RTY
    ITIC US
    30/11/2021
    Special Div
    18
    RTY
    BCC US
    30/11/2021
    Special Div
    3
    SPX
    PXD US
    29/11/2021
    Special Div
    3.02
     
     
    How do dividend adjustments work? 
    This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
  16. ArvinIG
    AUSTRALIAN DOLLAR, AUD/USD, AUD/CAD, EUR/AUD – TECHNICAL OUTLOOK
    Australian Dollar facing mixed signals vs. USD, CAD and EUR AUD/USD may reverse higher on support, AUD/CAD ranging EUR/AUD downtrend remains despite recent consolidation AUD/USD 4-HOUR CHART
    The Australian Dollar faces its next potential opportunity to reverse the near-term downtrend against the US Dollar since the beginning of this month. AUD/USD is facing a combination of a rising trendline from August and the 78.6% Fibonacci retracement level at 0.7249. This is making for a critical area of support as positive RSI divergence shows that downside momentum is fading.
    The latter can at times hint at a turn higher. Still, the 20- and 50-period Simple Moving Averages (SMA) remain downward-sloping. This follows a bearish ‘Death Cross’ from earlier this month. Clearing these lines could be a signal that the Aussie is ready to mount a recovery against the Greenback. Otherwise, clearing immediate support exposes the September low at 0.71660 towards the August low at 0.7103.
      Chart Created in TradingView
    AUD/CAD 4-HOUR CHART
    The Australian Dollar continues to trade within the boundaries of a Descending Triangle against the Canadian Dollar. As such, AUD/CAD could remain in a consolidative state, with a slight downward bias, until a breakout is achieved. For now, the pair has recently tested the upper bound of the triangle floor, which seems to be a range between 0.9096 and 0.9141.
    The 50- and 100-period SMAs seem to be offering a downward bias, with a ‘Death Cross’ having been established earlier this month. Clearing the 50-period line and 0.9190 could be a signal that prices may turn higher towards the ceiling of the triangle. Otherwise, diving deeper into the floor of the triangle will bring the pair closer to a breakout and the 100% Fibonacci extension at 0.9057.
    Chart Created in TradingView
    EUR/AUD 4-HOUR CHART
    All things considered, the Australian Dollar remains on the offensive against the Euro since August. This is despite recent consolidation in EUR/AUD. The broader downtrend still remains intact, especially with a falling trendline from late August maintaining the downside focus. Still, a bullish ‘Golden Cross’ remains in play from earlier this month between the 50- and 100-period SMAs.
    Immediate resistance seems to be 1.5745, where clearing the point would expose the trendline highlighted earlier. On the flip side, immediate support seems to be at 1.5444. Breaking under the latter may open the door to retesting the October low at 1.5351. Just under the latter sits the 1.5247 – 1.5287 support zone. These are current 2021 lows set earlier this year.
    Chart Created in TradingView
     
    Daniel Dubrovsky, Strategist for DailyFX.com
    19 November 2021
    To contact Daniel, use@ddubrovskyFX on Twitter
    DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
    DISCLOSURES
  17. ArvinIG
    The Tesco share price has soared 27% since March. As the UK's grocery market leader, it's benefitting from strong interim results, takeover rumours, and a rebounding economy. Could a Christmas boom see it rise higher?

    Source: Bloomberg   Shares Tesco Price United Kingdom Tax Lidl   At 279p right now, the Tesco (LON: TSCO) share price has climbed 27% since its low of 219p on 4 March. On 9 February, only a month before, each share was worth 312p. However, this sharp decline wasn’t due to any underling business issue. Instead, the grocer had decided to sell its Lotus branded stores in Thailand and Malaysia for £8 billion. £5 billion of this money was returned to shareholders via a special dividend, and this caused the share price to fall by a commensurate amount.
    After reporting excellent interim results last month, the FTSE 100 retailer could soar if consumer spending increases over the crucial Christmas trading period.
     
    Where do you think the Tesco share price will go next?
    Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty. You can also buy and take ownership of UK shares for just £3 with us. Open an account to start trading or investing in UK shares.
    1. Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
    2. Deal three times or more in the previous month to qualify for our best rate.
    New to IG? Tesco share price: a bullish buy?
    Tesco holds 27.6% of the UK grocery market share, making it the largest food merchant in the UK. It has almost twice the market share of its closest competitor, Sainsbury’s. Of course, it’s operating in an intensely competitive space, often pricing goods with wafer-thin margins. And discounters Aldi and Lidl are starting to nip at its heels.
    But in its interim results on 6 October, Tesco reported that revenue had risen 5.9% from £28.7 billion to £30.4 billion. And profit before tax leapt 107.4% from £551 million to £1.142 billion. Moreover, net debt fell 18.5% from £12.5 billion to £10.2 billion. These are healthy numbers, especially given that the rises are being compared to the lockdown figures from last year’s period, when many of its competitors were forced to close.
    This strong showing makes Tesco a potential target for a private equity buyout. Its former CEO, Sir Terry Leahy, now works as an advisor for Clayton, Dubilier & Rice. The US firm bought out Morrisons earlier this year in an auction showdown. And while buying out Tesco would be significantly more expensive than its smaller competitor, investment bank Liberum believes UK shares are 30.4% undervalued compared to their US counterparts.
    Trade Tesco shares now?
    Source: Bloomberg Staff and supply shortages
    On the other hand, there’s plenty of headwinds for the grocer. To start with, the labour shortage is making it harder to keep stores fully staffed. Competitor Lidl is increasing hourly pay to £10.10 next year in a bid to retain shop floor employees.
    Moreover, Tesco is offering £1,000 bonuses to HGV drivers as the lorry driver shortage starts to bite. And its grocery delivery service, which expanded massively during the lockdown era, has run into problems recently. Its website was recently hacked and kept offline for two days. 300,000 customers are currently waiting for Christmas delivery slots. And empty shelves are becoming more commonplace, with the company even resorting to cardboard cut-outs being put in place of fresh food.
    Having to raise wages will bite into its wafer-thin profit margins. Of course, it could choose to raise prices. But inflation already rose to 4.2% last month and is predicted by the Office for National Statistics to hit 5% by April next year. Of course, it could go much higher than that in specific sectors, including grocery. And hard-pressed consumers may start to avoid higher margin premium products if prices rise too high.
    But £210 billion has accumulated in the UK bank accounts since the pandemic began. And with Christmas effectively cancelled in 2020, consumers may be prepared to spend extra this year. However, Tesco’s recent advertising campaign left a sour taste in the mouths of some customers when it depicted Santa with a vaccine passport.
    And Amazon is beginning to launch its own cashier-free grocery stores, with plans to open 260 by 2024. And it has the massive buying power that Tesco’s other competitors lack.
    If the FTSE 100 grocer can manage inflation, supply chain issues, and staffing costs, the Tesco share price could continue to soar. It’s a potential buyout target and is delivering consistently healthy results. However, if disposable incomes become too squeezed, the grocery price war could well intensify. And with margins already under pressure, a cloud could be cast over Tesco’s Christmas cheer.
    Open your account
    Charles Archer | Financial Writer, London
    19 November 2021
  18. ArvinIG
    The Royal Dutch Shell share price has soared this year as the price of oil hits a multi-year high. Could its proposed move to London and accelerated green transition see it rise back to pre-pandemic heights?

    Source: Bloomberg   Commodities Price of oil Petroleum Price Share repurchase United Kingdom   At 1,684p today, the Shell (LON: RDSA) share price is down 5% in the past month. But it’s up 18% in the past six months, and 86% from its pandemic low of 904p on 2 October 2020.
    But at the beginning of January 2020, it was 2,306p. This was less than two years ago. And as the share price has been steadily rising over the past twelve months, optimists believe it could return to this price before long. Booming oil prices, increasing investment in green energy, and this week’s announcement of a headquarters move could all be catalysts for further upwards movement.
    Where do you think the Shell share price will go next?
    Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty. You can also buy and take ownership of UK shares for just £3 with us. Open an account to start trading or investing in UK shares.
    1. Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
    2. Deal three times or more in the previous month to qualify for our best rate.
    New to IG? Shell share price: headquarters move
    Like a younger sibling starting out at school, Royal Dutch Shell could soon be known by its surname only. The FTSE 100 energy giant plans to move its headquarters and tax residence from the Netherlands to London to make its share structure ‘simpler to understand and value,’ and to boost the ‘speed and flexibility’ of shareholder pay-outs.
    Under the plans, CEO Ben van Beurden, CFO Jessica Uhl, and seven other senior employees will also move to the UK. The decision will be put to a vote on 10 December, requiring a 75% majority to pass.
    One important consequence of the move is that Shell‘s complex dual-class share structure will be reduced to a single share structure. This is significant because in July, it announced a $7 billion share buyback funded from the sale of its US Permian Basin oilfield.
    Under its current structure, Dutch-listed A shares are liable for a 15% dividend withholding tax, while UK B shares are not. Therefore, Shell is only purchasing UK B shares in the buyback. And as quarterly purchases of B shares are capped at 25% of average daily trading volume, this severely restricts share liquidity. Jeffries analyst Giacomo Romeo believes that the move to London is a ‘particularly important point because…the liquidity of the pool of shares available for buybacks will increase.’
    If Shell does move out of the Netherlands, the share buyback will, in theory, accelerate, and the share price should rise. But what happens in practice could be more unpredictable.
    Trade Shell shares now?
    Source: Bloomberg Q3 2021 results
    The headquarters move comes after US hedge fund Third Point bought a stake in the company and argued for it to be split into two ‘standalone companies,’ by spinning off its renewable energy business. However, van Beurden dismissed the idea, saying that Shell’s transition to net-zero ‘will be funded by the oil and gas business.’ And cynics could argue that the move allows the company to avoid the Hague’s ruling that ordered it to cut customer CO2 emissions by 45% by 2030.
    But Q3 results underscore van Beurden’s reasoning. Last month, he commented ‘this quarter we've generated record cash flow ($17.5 billion), maintained capital discipline and announced our intention to distribute $7 billion to our shareholders.’ And much of Shell’s profits have come from the massive spike in oil prices. Brent crude is at a multi-year high of over $80 a barrel, and the Bank of America is predicting it could hit $120 a barrel by June next year.
    And it is using some of these windfall profits to fund its green transition. Shell is aiming to cut traditional fuel production from 100 million tonnes to 45 million tonnes, with an ‘absolute emission reduction target of 50% by 2030.’ And within the next three years, it plans to expand its electric car charging points from 80,000 to 500,000 globally, while generating 2 million tonnes of sustainable aviation fuel.
    In the long-term, this metamorphosis into renewables will dictate the future of the Shell share price. But in the short-term, increased share buybacks could potentially have a strong upwards effect. However, this assumes the headquarters move will be approved, oil prices remain high, and global monetary policy remains steady in the face of an unpredictable pandemic and rising inflation. Shell faces multiple moving factors, and not all of them can be controlled.
    Open your account

    Charles Archer | Financial Writer, London
    18 November 2021
  19. ArvinIG
    The Vodafone share price has risen 6% today, as rising revenue has resulted in increased optimism for the growth of its European and African businesses. Will the telecoms giant see a revival in its fortunes?

    Source: Bloomberg   Shares Vodafone Price Investor CFD TPG Telecom   The Vodafone (LON:VOD) share price has put on a poor performance for long-term investors. It was 205p five years ago and hit its five-year high of 237p on 5 January 2018.
    The FTSE 100 stock’s price then started demonstrating the volatility of a yo-yo. By 24 May 2019, it had fallen to 126p. On 21 February 2020, it had risen back to 155p. The pandemic mini-crash saw it collapse to 105p on 13 March, before recovering to 139p by 5 June. Then it fell to a five-year low of 102p on 2 October 2020.
    By 7 May 2021, the Vodafone share price recovered to 142p but had again fallen to 108p by the end of October. However, it’s been rising in November. And today’s H1 FY22 results have seen it leap 6% to 120p. Could this be the landing stage for Vodafone shares to finally take off?
    Where do you think the Vodafone share price will go next?
    Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty. You can also buy and take ownership of UK shares for just £3 with us. Open an account to start trading or investing in UK shares.
    1. Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
    2. Deal three times or more in the previous month to qualify for our best rate.
    New to IG? Vodafone share price: H1 FY22 results
    CEO Nick Read commented that H1 results show that Vodafone has ‘demonstrated good sustainable growth and solid commercial momentum.’ In particular, he highlighted that the ‘strengthened performance in Africa and Europe puts us on track to be at the top end of our guidance for this year.’ And the numbers back him up. The full-year adjusted earnings forecast is now €15.2 billion to €15.4 billion. Revenue increased 5% from €21.4 billion to €22.5 billion, driven by ‘growth in Europe and Africa and a recovery in handset sales.’
    Operating profit fell by 21.9% from €3.4 billion to €2.6 billion. However, in H1 FY21, Vodafone made a one-off €1 billion profit from the merger of Vodafone Hutchison Australia and TPG Telecom Limited. Stripping this out sees an operating profit increase of around €200 million. And encouragingly, cash flow increased 7.4% to €6.5 billion.
    However, net debt increased over the past six months by €3.8 billion to €44.3 billion. The company put most of this down to free cash outflow of €1.0 billion, equity dividends of €1.3 billion, and money spent on share buybacks. While increasing debt can be a good sign for long-term growth, it also leaves Vodafone potentially exposed to any upcoming economic shocks.
    Trade Vodafone shares?
    Source: Bloomberg Time to skyrocket?
    It’s no secret that the telecoms industry has struggled for growth over the past few years. But Read commented in an interview with the Evening Standard that Vodafone was now seeing ‘a sustained growth engine’ when growth had ‘historically been flat to negative.’ He continued that ‘the pandemic slowed down commercial momentum, now we’re seeing that coming back.’
    Already, revenue is increasing from roaming charges as travel bounces back, and mobile consumers begin to switch to more profitable 5G contracts. And once Vodafone has direct access to some of the EU’s €750 billion pandemic Recovery Fund, Read wants to increase the company’s presence in its largest market, Germany, as well as improve its performance in Spain.
    Moreover, as €150 billion of the fund has been set aside for helping businesses to digitise, Vodafone should also profit indirectly from companies seeking its help for a future digital transformation. It’s already demonstrating potential in this area with its healthcare digitisation partnership with Deloitte.
    Meanwhile M-PESA, Vodafone's FinTech venture in Africa, is rapidly growing, and now serves over 49 million customers. With the continent highlighted as key for ‘commercial momentum,’ the opportunity for future expansion is immense.
    With masses of public money available, and increasing growth across the two continents, the Vodafone share price may soon skyrocket. After positive results today, some investors will also be tempted by its 6% dividend yield. But high debt and an unstable share price might see some fingers getting burnt.
    Start trading now?
    Charles Archer | Financial Writer, London
    17 November 2021
  20. ArvinIG
    The Bank of England is forecasting a base interest rate rise in the ‘coming months.' But the US Federal Reserve is insisting that rising inflation is 'transitory.' Could a policy divergence see sterling soar?

    Source: Bloomberg   Forex Inflation Pound sterling Interest rate Federal Reserve Monetary Policy Committee (United Kingdom)   GBP/USD is one of the most popular Forex currency pairs. And right now, 73% of IG clients are long on the market, with £1 currently buying $1.34.
    This optimism for sterling is due to the perceived likelihood that the UK’s Bank of England will raise its base interest rate before the US’s Federal Reserve. As a currency’s base rate is arguably the most important factor in determining its strength, the client consensus isn’t particularly surprising. Moreover, many of these clients will be position traders, prepared to wait until the UK raises its base rate. But the Federal Reserve might act first.
    Do you think sterling will strengthen against the US dollar?
    Trade 100+ FX pairs with the UK's No. 1 forex provider. * Enjoy fast execution and low spreads. We'll never fill your order at a worse price. Create an account with IG to start trading forex today.
    * By number of primary relationships with FX traders (Investment Trends UK Leveraged Trading Report released June 2020).
    New to Forex? Where next for sterling?
    The strength of sterling is directly tied to potential interest rate rises in the face of racing inflation. On 4 November, the Bank of England held off from raising the base rate from its historic low of 0.1%, which saw sterling fall 1% against the dollar. Governor Andrew Bailey was labelled a 'bad boyfriend' for indicating to traders that a rise should be expected.
    While the Monetary Policy Committee (MPC) voted 7-2 in favour of no change, Bailey described it as a ‘close call,’ with the MPC saying there was ‘value’ in waiting to see how the jobs market coped with the end of the furlough scheme. And it signalled it will be raising rates in the ‘coming months.’
    But with the Resolution Foundation reporting that only 136,000 out of the 1.1 million people still on furlough had moved into unemployment or inactivity, the chance of a rate rise has probably now fallen.
    And Bailey said the decision was ‘a reflection of the position we’re in.’ His view is that inflation is being caused by the global supply chain crisis, and therefore increasing interest rates domestically will make little difference to consumer prices. But he accepts there will be ‘some need to increase interest rates to bring inflation sustainably back to target.’ And the ONS has predicted that inflation will rise to 5% by April 2022, more than double the Bank’s 2% target.
    However, raising rates too soon risks strangling the green shoots of economic recovery, as it would increase the cost of servicing debt, including mortgages and credit cards.
    And National Insurance is increasing by 1.25 percentage points in 2022. Corporation tax is rising from 19% to 25% in 2023. Income tax bands are frozen until 2026, while council tax continues to rise by 5% a year. There are even rumours that the student loan repayment threshold might soon be lowered. Demand, and therefore inflation, could drop off without a rate rise.
    With rising energy, food, and petrol prices contributing to the cost-of-living crisis, the Bank has a very delicate balance to strike. The most recent MPC report expects price rises to outstrip earnings until 2024. Accordingly, rates could still rise to 1% by the end of 2022.
    Trade GBP/USD now?
    Source: Bloomberg US inflation surges
    Pressure on the Federal Reserve is also intensifying as US inflation is now running at 6.2%. This is 1.2 percentage points higher than the UK’s expected peak and represents the highest inflation rate since 1990.
    Worryingly, the labour department report shows prices rose 0.9% in October, more than double the 0.4% jump in September. Moreover, energy prices are up 30% and food up 5.3% over the past year.
    Like the UK, these pressures are being blamed on global supply chain issues. But last week, Chairman Jerome Powell said that inflation has been ‘longer lasting than anticipated,’ and that it was ‘very difficult to predict the persistence of supply constraints.’
    President Jo Biden has also just passed a $1.2 trillion infrastructure bill, and could soon increase social spending by $1.75 trillion. This cash influx is likely to have an additional inflationary effect.
    This leaves the currency pair in an interesting position where it seems likely that the UK will raise rates before the US, despite having significantly lower inflation. If it does, then sterling will rise. But with inflation running so high across the pond, the Federal Reserve could emulate the Bank of England's unpredictability, and spring a surprise on unsuspecting traders.
    Start trading now?   Charles Archer | Financial Writer, London
    16 November 2021
  21. ArvinIG
    Q3 earnings season propelled the S&P 500 to fresh record highs; although company’s flag concerns about the impact of higher costs on future profits.

    Source: Bloomberg   Indices Shares S&P 500 Inflation Revenue COVID-19 recession   When does the US reporting season come to an end?
    Q3 US earnings season will come to an end in the next fortnight, with 92% of companies having reported as of November 12, 2021.
    What are the 3 biggest issues this quarter?
    Earnings and revenue growth beats analyst forecasts
    Earnings and revenue exceeded expectations in the quarter, with financial data company FactSet Research Systems Inc putting earnings growth for the quarter at 39.1%, and revenue growth at 17.5%. This bested the consensus estimate heading into the quarter’s results of 27.4% and 14.9%, respectively. Although not as robust as the previous quarter’s earnings growth of 87%, which benefitted from the base effects of the Covid-19 recession a year earlier, it was still the third highest EPS growth rate for the US 500 in over a decade.
    Inflation at risk and high costs threaten profit margins
    Although both the bottom and top lines of S&P 500 companies delivered better than expected results for the quarter, there remained some cautionary messages from company’s when it came to the issues of inflation. Based on data from FactSet, the number of corporates mentioning inflation in earnings calls was at more than a decade high in Q3, with the threat of higher costs lowering analyst estimates for future profit margins. The impact is expected to materialize in coming quarters, with margin estimates revised lower, despite company’s exceeding analysts’ profit margins forecasts for Q3.
    Beat/miss ratio falls while Q4 profits get revised
    There are signs that earnings momentum may be slowing for S&P 500 companies, with slower growth and higher costs likely to weigh on profits in the future. The beat/miss ratio for S&P 500 companies dropped to 81% this quarter from around 87% in the previous one, while earnings growth for Q4 was revised lower very modestly to 20.9% from 21%. This comes despite an estimated increase in revenue growth next quarter, with the slowing momentum in profits coming due to the expected squeeze on margins from rising costs.

    Source: FaceSet S&P 500 rallies through earnings season as profits push index to record highs
    Earnings season proved a major boost for the S&P 500, which has managed to climb by 6.5% between Monday 11th October and Friday 12th November. The rally pushed the S&P 500 into technically overbought territory, with the index pulling back in recent days as momentum turned lower, breaking trendline support in the process. With earnings season no longer a driver of sentiment, and concerns about inflation and interest rate hikes from the Fed seizing the narrative, the S&P 500 could pull-back further as upside momentum fades. A break of support at ~4645 could see the index revert to its 20 DMA just above 4600, with the key level below that 4545. A break above ~4715 and to fresh record highs would confirm the bulls remain in control of the index.

    Source: TradingView Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
    Kyle Rodda | Market Analyst, Australia
    16 November 2021
  22. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 15th November 2021. These are projected dividends and likely to change. IG cannot be held responsible for any changes made.
    Dividends highlighted in red include a special dividend, therefore some or all of the amount will not be adjusted. Amount in brackets is the expected adjustment after special dividends excluded (where shown on major indices). Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day. 
    If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.
     

    NB: All dividend adjustments are forecasts and therefore speculative.
    A dividend adjustment is a cash neutral adjustment on your account.
     
    Special Dividends:
     
    Index
    Bloomberg Code
    Effective Date
    Summary
    Dividend Amount
    RTY
    BGFV US
    16/11/2021
    Special Div
    1
    RTY
    CNXN US
    16/11/2021
    Special Div
    1
    RTY
    HL US
    18/11/2021
    Special Div
    0.0075
    RTY
    PRK US
    18/11/2021
    Special Div
    0.2
    RTY
    CFFN US
    18/11/2021
    Special Div
    0.22
    RTY
    HVT US
    19/11/2021
    Special Div
    2
    RTY
    PIPR US
    22/11/2021
    Special Div
    3
    RTY
    RRR US
    22/11/2021
    Special Div
    3
    RTY
    SBSI US
    23/11/2021
    Special Div
    0.06
    RTY
    MNRL US
    23/11/2021
    Special Div
    0.26
     
     
    How do dividend adjustments work? 
    This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
  23. ArvinIG
    The Marks and Spencer share price is up 92% since this time last year, as CEO Steve Rowe's turnaround plan begins to bear fruit for the FTSE 100 retailer. Can it return to its five-year high of 386p?

    Source: Bloomberg   Indices Shares Marks & Spencer Price Retail Investor   At 232p right now, the Marks and Spencer (LON: MKS) share price has soared 20% since market close on Tuesday, due to stellar H1 2021 results. And in fact, its share price is up 34% in the past month, 49% in the past six months, and 92% in the past year.
    Of course, some perspective is important. To reach its five-year high of 386p it hit on 26 May 2017, it would have to rise another 66%. And it was 214p on 3 January 2020, before the pandemic saw it crash 58% to 90p by 24 April 2020.
    While the past year has been stellar for recent investors, long-term shareholders are simply seeing the share price recover to its pre-pandemic point. And CEO Steve Rowe has highlighted plenty of speedbumps in the way of further gains.
     
    Where do you think the Marks and Spencer share price will go next?
    Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty. You can also buy and take ownership of UK shares for just £3 with us. Open an account to start trading or investing in UK shares.
    1. Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
    2. Deal three times or more in the previous month to qualify for our best rate.
    New to IG? Marks and Spencer share price: H1 results
    Like many FTSE 100 companies, the retailer has chosen to compare 2021 figures with the 2019 financial year, as the impact of the pandemic in 2020 ‘renders comparisons…less meaningful.’
    The retailer boasted strong financial results for H1 2021. Profit (before tax and adjusting items) rose to £269.4 million, a 55% increase compared to the £176.3 million profit in the same period in 2019. Meanwhile, net debt fell to £3.15 billion, down 22.6%.
    Food sales rose 10.4%, while food operating profit (before adjusting items) rose to £143.7 million from £92.2 million.
    Clothing sales fell 1%, but this headline figure masks an encouraging transformation. Full-price sales rose by 17.3%, while online sales grew 60.8% and now represent over a third of total clothing revenue. Operating profit (before adjusting terms) in the division rose 43%, from £109.6 million to £156.2 million. While sales may have fallen slightly, the retailer called the increased profitability ‘substantial progress.’ It said a ‘re-engineering’ of the division to reduce the reliance on promotions and cut down the range of items was ‘now demonstrating its potential to reverse years of decline.'
    Rowe said that the company ‘won’t overclaim our progress (but) it is clear that underlying performance is improving.’
    Start trading now?
    Source: Bloomberg Looking forward
    Marks and Spencer now expects full-year underlying profits to be about £500 million. This is £150 million more than its updated prediction in August, and £97 million more than the profits of 2020.
    Rowe’s plan for the company has been crucial to the turnaround. To cut costs, he slashed thousands of jobs at the start of the pandemic. And now he wants to permanently close 73 ‘full-line’ stores as the pandemic has accelerated the shift to online. However, it’s also likely that the collapse of close competitor Debenhams has also been an important factor.
    But Rowe can take full credit for spending £750 million on a 50% stake in Ocado back in February 2019, just before the pandemic struck. Investor consensus was that Rowe had overpaid for Ocado, and the Marks and Spencer share price dropped 12% in a single day, wiping £550 million off its market cap. He commented at the time that ‘we think we’re paying a fair price.’ Clearly, it now appears that this investment was excellent value.
    But the CEO has concerns for the future. He warned investors that ‘well-publicised supply chain pressure, combined with pandemic supply interruptions, rising labour costs, EU border challenges and tax increases means the cost incline becomes steeper in the second half and steeper again in the 2022-23 year.’ And the company is having to increase pay to attract workers, with lorry driver shortages highlighted as a potential long-term problem. But it’s hardly the only company with this issue.
    The Marks and Spencer share price may just be getting started. Increased food revenue, higher clothing profitability, and a CEO with a working turnaround plan are all positive indicators. But with the wider economic situation uncertain, there can be no guarantees.
    Take your position Charles Archer | Financial Writer, London
    12 November 2021
  24. ArvinIG
    The Persimmon share price has risen slightly since yesterday's trading statement. But with lenders increasing mortgage rates, the future is far from certain for the FTSE 100 housebuilder.

    Source: Bloomberg   Shares Price Persimmon plc Inflation Real estate economics Interest rate   The Persimmon (LON: PSN) share price is highly cyclical. It was 1,687p five years ago, before rising to 2,880p by 8 June 2018. It then slowly fell to 1,900p by 30 November 2018.
    After recovering to 2,468p by 22 February 2019, it fell again to 1,841p on 16 August 2019. Next, it rocketed to 3,282p by 21 February 2020. However, the onset of the pandemic saw it fall 50% to 1,622p by 3 April 2020. But less than a year later, it had risen to 3,238p on 1 June 2021.
    Since then, Persimmon's share price has fallen to 2,690p. And it could sink further.
    Where do you think the Persimmon share price will go next?
    Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty. You can also buy and take ownership of UK shares for just £3 with us. Open an account to start trading or investing in UK shares.
    1. Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
    2. Deal three times or more in the previous month to qualify for our best rate.
    New to IG? Persimmon share price: trading update
    But Persimmon struck a bullish tone for the future. CEO Dean Finch said that ‘Persimmon continued to perform well through the period against a backdrop of healthy demand.’ He further commented that ‘healthy selling prices and our off-site manufacturing capabilities are mitigating inflationary pressures.’
    And the numbers support his claim of a strong performance in the period. Average reservations per site of private new home sales are around 16% higher than in 2019. In terms of growth, Persimmon expects to deliver around 10% more completions in 2021 compared to 2020. £1.15 billion of forward sales are reserved beyond 2021, £200 million more than in 2019. Encouragingly, customer satisfaction is over 92% for the survey year.
    Moreover, the group is in a strong financial position. It’s spent £380 million on new land for building year-to-date and has maintained a healthy cash balance of £895 million. Given these positive metrics, it might be surprising to the casual observer that the Persimmon share has fallen 16% in the past six months. But there are several potential explanations.
    Start trading now?
    Source: Bloomberg Persimmon's outlook
    Persimmon believes that ‘the fundamentals of the UK housing market remain strong, with good levels of consumer demand and confidence, mortgage availability and low interest rates.’
    But like competitors Taylor Wimpey and Barratt Developments, the Persimmon share price is highly cyclical. And the UK housing market might have peaked, with average prices rising 10.6% in the past year to August 2021 to £264,000. While Strutt and Parker believe prices could rise another 7% in 2022, this is far from guaranteed. In the near term, winter is traditionally quieter for the housing market. And while the ‘race for space’ may be continuing, the end of stamp duty holiday in September will take some heat out of the market.
    One key concern for Persimmon is the effect of inflation and interest rates on UK house prices. The company said it will ‘continue to manage the inflationary pressures in the industry well and anticipate that margins will remain resilient.’ It acknowledged the ‘continuing concerns relating to the pandemic on cost inflation and the supply chain and their impact on interest rates, consumer confidence and the UK economy.’
    But house prices are determined by mortgage affordability. The base interest rate has been held under 1% for over a decade, and the Bank of England held off from raising it last week. However, mortgage rates are already increasing in anticipation of rises in 2022. And as banks generally limit mortgage borrowing to 4.5x earnings, there comes a point where prices will stagnate as buyers become unable to meet the leveraging requirements.
    With inflation set to hit 5% in April next year, and supply chain issues remaining stubbornly persistent, the cost and availability of building materials could become a profitability problem. Moreover, if there’s a housing market correction, Persimmon will get less money for the homes it sells.
    But the builder believes it can ‘successfully manage these uncertainties.’ Persimmon does offer an attractive dividend yield of 8.9% and boasts a very reasonable price-to-earnings ratio of around 11. If inflation is indeed transitory, and interest rates remain low, the Persimmon share price could rise again. But unfortunately for the housebuilder, this decision is out of its hands.
    Trade Persimmon shares Charles Archer | Financial Writer, London 
    11 November 2021
  25. ArvinIG
    The Rolls-Royce share price has risen 5% to 149p. It's announced £450 million in funding from the government and private investors for the development of mini nuclear reactors to kickstart the UK's green economy.

    Source: Bloomberg   Shares Roll-Royce Nuclear reactor United Kingdom Nuclear power Price   The Rolls-Royce (LON: RR) share price is no stranger to volatility. Shares in the multinational aerospace and defence company hit an all-time high of 1,159p back in December 2013. It then fell to 531p by 29 January 2016, before peaking at 1,088p on 3 August 2018. Slowly sliding in value, the pandemic’s effect on the aerospace industry saw it sink to an all-time low of 69p on 6 November 2020. Since then, Rolls-Royce has been on an aggressive £2 billion cost-cutting mission whilst landing multiple new contracts in the past few months. At 149p today, it’s risen 115% over the past year.
    And with increasing government investment in the company’s ventures, it could have further to rise.
    Where do you think the Rolls-Royce share price will go next?
    Take your position on UK shares for just a small initial deposit with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty. You can also buy and take ownership of UK shares for just £3 with us. Open an account to start trading or investing in UK shares.
    1. Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
    2. Deal three times or more in the previous month to qualify for our best rate.
    New to IG? Rolls-Royce mini nuclear reactors
    Rolls-Royce has now secured the funding to develop state-of-the-art mini nuclear reactors. The company said that ‘Rolls-Royce Group, BNF Resources UK Limited and Exelon Generation Limited will invest £195m across a period of around three years. The funding will enable the business to secure grant funding of £210 million from UK Research and Innovation funding,’ as part of the government’s green 10-point plan in the wake of COP26. Rolls-Royce will increase funding by £50 million in the second phase.
    One key advantage of the mini reactors is that they are cheaper and faster to roll out than current large-scale reactors. For example, Hinkley Point C, which is still under construction, had an initial price tag of £18 billion. But it’s already risen to £23 billion.
    Rolls-Royce said it would ‘harness decades of British engineering, design and manufacturing,’ to roll out the first of the mini reactors, with each generating enough electricity to power 1.3 million UK homes. Costing £2 billion, they generate significantly cheaper electricity than the traditional large-scale reactors. And with 20% of the UK’s electricity currently generated by large-scale nuclear reactors that are due to retire by 2025, Rolls-Royce seems to have identified a profitable gap in the market.
    CEO of the new SMR (small modular reactor) consortium, Tom Samson, said it would ‘deliver a low cost, deployable, scalable and investable programme of nuclear power plants,’ describing the deal as a ‘major vote of confidence in British nuclear technology.’ The first SMR is planned to go online by 2031, with plans for 15 more as the project advances.
    And Business Secretary Kwasi Kwarteng said it was a ‘once in a lifetime opportunity for the UK to deploy more low carbon energy than ever before.’ He also highlighted the potential for the UK to become a ‘global leader in innovative nuclear technologies we can potentially export elsewhere.’
    Trade Rolls-Royce shares
    Source: Bloomberg Rolls-Royce share price: Where next?
    If this share price story seems familiar, that’s because it is. On 27 September, Rolls-Royce announced a new $2.6 billion contract to supply and maintain engines for the US air force. The share price rose 10% to 147p, before falling back to 131p by 29 October. A similar fall after today’s announcement is perfectly possible.
    But the company expects a return to profitability in 2022. And its £2 billion disposal program is continuing apace — yesterday, it completed the sale of its civil nuclear business to Framatome. CEO Warren East says that this ‘leaner cost base together with a strong liquidity position’ will give Rolls-Royce capital to grow when global aviation travel recovers.
    And the new nuclear deal is not its first piece of green news this year. It’s designed a new Ultrafan engine that will be 25% more fuel-efficient than current models, with a power gearbox that recently broke the aerospace world record. Meanwhile, Rolls-Royce has committed to being a net-zero company by 2050.
    The Rolls-Royce share price is 87% below its all-time high. It’s unlikely to rocket ten-fold anytime soon. But the disposal of non-core assets to focus on new profitable ventures could see a slow long-term price recovery.
    Start trading now?   Charles Archer | Financial Writer, London
     10 November 2021 00:35

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