Jump to content

ArvinIG

Community Member
 View Profile  See their activity

  • Posts

    1,728

  • Joined

  • Last visited

  • Days Won

    23

 Content Type 

Blog Entries posted by ArvinIG

  1. ArvinIG

    Easter Trading Hours 2022

    By ArvinIG,


    Trading hour changes
    Dear IG Community,

    Please find below the upcoming changes to our trading hours over the Easter period.

    UK:

    Australia:

    Feel free to reach out if you have any query and Happy Easter !

    All the best - Arvin
  2. 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
  3. 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
  4. ArvinIG
    We examine how three of Australia’s top brokers reacted to Afterpay’s full-year earnings report.

    Source: Bloomberg   Shares Afterpay Price Share price Earnings before interest, taxes, depreciation and amortization UBS   When the Square-Afterpay acquisition was announced in early August, Afterpay (ASX: APT) provided the market with a relatively comprehensive FY21 trading update. That update, had most, though not all of the ingredients investors and traders would’ve likely been eyeing from an operational perspective.
    Indeed, many of these pre-released metrics were reiterated as part of Afterpay’s full-year FY21 results, handed down to the market on Wednesday, August 25.
    The Afterpay share price finished Wednesday’s session down 1.18% to $133.50 per share.
    FY21 results
    On the top-line, Afterpay reported full-year underlying sales of $21.2 billion, implying a year-on-year increase of 90%.
    All of this drove revenue higher, with the company generating total income of $924.7 million in FY21, up 78% from a year ago.
    Overall, the business maintained its margins from the year prior, registering a merchant margin of 3.9%, while net margins came in at +2%.
    These operational feats were underscored by a solid increase in customers and users. During FY21 active Afterpay customers rose 63% to hit 16.2 million. That impressive figure was matched by even more rapid growth in the company's merchant base, with total active merchants hitting 98.2 thousand, implying a year-on-year growth rate of 77%.
    Yet all this growth came at a cost: EBITDA was $38.7 million, down 13% from the year prior, while losses continued to snowball, coming in at $159.4 million – equivalent to a 597% increase year-on-year.
    Click here to read our beginners’ guide to fundamental analysis.
    Analyst perspectives
    Below we look at how three key Australian brokers responded to Afterpay’s latest round of FY21 results.
    Wilsons
    Analysts from Wilson’s – who have a $151.05 per share price target on Afterpay – honed in on the Square-Afterpay deal, saying:
    ‘Much of the focus will remain on the SQ share price and the SQ/APT share ratio of 0.375. Not with standing this, until deal closure we’ll remain observant of the core underlying trends.’
    The broker went on to say:
    ‘With Q4’21 trading announced prior to today’s results, we noted that Underlying Sales trends, Margins, and operating conditions were continuing as expected with few (if any) surprises.’
    UBS
    The bear amongst the bulls – UBS reacted with little enthusiasm to Afterpay’s full-year report. Here the investment bank reiterated its $42.00 price target, while saying:
    ‘Top-line pre-reported, net transaction margin slightly below consensus. Focus remains on Square’s proposed acquisition.’
    RBC
    Finally, analysts from RBC took a more granular view, turning their attention to the results that Afterpay had yet to report before today’s release. Here the broker said:
    ‘With most of the customer and topline metrics pre-reported, the focus of today’s result was on the gross losses, transaction metrics, and EBITDA. All of the key metrics are heading north, and data points which stood out were earlier customer cohorts transacting 34x per year.’
    RBC has a $127.00 per share price target on Afterpay.
    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.
    Shane Walton | Financial Writer, Australia
    Wednesday 25 August 2021
  5. ArvinIG

    Why are BHP shares down?

    By ArvinIG,


    Market News
    The Australian mining giant’s latest less-than-stellar production update brought the stock's recent rally to an abrupt halt.

    Source: Bloomberg   BHP (ASX: BHP) share price fell to A$38.39 on Tuesday (19 October) The mining play reported lower copper and iron ore production volumes for the September-ending quarter Analysts are largely optimistic about the stock, which is up 2.3% in the last one month Keen to take advantage of BHP’s rising share price? Open an account with us to long the stock now. BHP stock price: what’s the latest?
    BHP shares closed 2% lower on Tuesday, after it reported a year-on-year decline in copper and iron ore production for its latest financial quarter.
    Copper production dropped 9% in the September-ending quarter against the same period a year ago, while iron ore production fell 4% from September 2020.
    The group said lower copper volumes were experienced at the Olympic Dam, due to the commencement of a planned smelter maintenance campaign, which led to a one-month delay on top of Covid-19 related border restrictions.
    Iron ore production figures were also due to planned major maintenance, including car dumper one and the impacts of temporary rail labour shortages caused by pandemic-related border restrictions.
    Nevertheless, BHP guided that copper production for the full 2022 financial year remains unchanged at between 1,590 kilo tonne (kt) and 1,760 kt. Iron ore guidance for the year also remains unchanged at between 249 mega tonne (mt) and 259 mt.
    Read more: Beginner’s guide to day trading
    How do analysts currently view BHP?
    The stock is up 2.3% in the last one month, but down 11% year to date.
    Shares have been rising of late, thanks to rallying iron ore prices.
    Eight analysts recommended ‘buy’ on the Australia-listed counter as of mid-October 2021, with five rating it ‘hold’, and none giving ‘sell’ calls. Their average price target was A$47.89, Bloomberg data showed.
    On Monday (11 October), Bernstein and Macquarie both gave ‘outperform’ ratings, alongside targets of A$45 and A$56 respectively.
    Deutsche Bank suggested BHP was a ‘buy’ in the short term, as the counter had ‘materially lagged’ its peers since mid-August. ‘We’ve been surprised by the underperformance given the powerful rally in energy and coking coal prices in recent weeks,’ the analysts wrote.
    However, they pointed out that near-term downside risks included declining commodity prices and a strong US dollar.
    Feeling bullish or bearish about BHP shares?
    Take your position on BHP and over 13,000 Australian and international shares via CFDs or share trading – and trade it all seamlessly from one platform.
    Learn more about share CFDs or share trading with us, or open an account to get started today.
    Kelvin Ong | Financial writer, Singapore
    19 October 2021
  6. ArvinIG
    The BoJ is set to hold their monetary meeting across 20 – 21 July 2022, with expectations for the BoJ to delay jumping on the bandwagon for rate hikes once again.

    Source: Bloomberg   Forex Bank of Japan Japanese yen USD/JPY United States dollar Central bank   Central bank expected to head for a no-change once more
    The Bank of Japan (BoJ) is one of the last few central banks to hop onto the bandwagon for rate hikes, with its accommodative monetary policies set to remain for the upcoming July meeting as well. Current market expectations are unanimously pricing for a no-change and looking further out, probability of a 0.10% hike is priced at only 3.7% for the September meeting while increasing to 22.3% in the October meeting. The BoJ Governor Haruhiko Kuroda has recently stuck to his view last week that Japan’s economy outlook still carries ‘very high uncertainty’ and maintains the central bank’s readiness to ramp up stimulus if needed. The reiteration of his usual guidance seeks to push back against any hawkish expectations, which have previously been built up on the weaker-yen story.
    Keeping its current policy settings unchanged will include maintaining its target of -0.1% for short-term rates and the upper limit of 0.25% for its 10-year bond yield. The BoJ has thus far proven its resolve in keeping its yield curve control (YCC) intact with aggressive bond buying, in a bid to push back against bond traders seeking to challenge its policy status quo on multiple occasions.
    Weak-yen story could see some alleviation for now
    With talks of a 100 basis-point (bp) hike surfacing after the upside surprise in US June consumer price index (CPI), the USD/JPY is currently hanging close to yet another 24-year high. Concerns on the rapid weakening in yen continues to be highlighted but thus far, there has been a lack of any currency interventions after months of jawboning. With Japan being a major oil-importing country, the pressure for elevated energy costs with a weaker yen could see some alleviation, with oil prices down more than 20% from its June peak. This may aid to substantiate the no-change policy in the upcoming BOJ meeting, with the BoJ continuing on its path of divergence with other global central banks.
    Outlook report to provide fresh update on economic conditions
    The upcoming BOJ meeting will also see the release of its quarterly outlook report, which could bring about an upward revision in inflation forecast above its 2% target. Previous 1.9% forecast could seem understated, with core inflation in April and May this year already surpassing the 2% mark. That said, the BoJ has firmly stuck to its view of cost-push inflation being temporary and are likely to emphasise on stronger wage growth for any sustainability of its 2% inflation target. With Japan’s average cash earnings failing to see any significant pickup yet (1.0% year-on-year (YoY) in June), a status quo in monetary policies is set to remain.
    This could also be justified with a potential downward revision in growth projections, from previous 2.9% for fiscal 2022. A record high in daily Covid-19 cases seems to bring back questions surrounding the reimplementation of virus restrictions and although there has been some pushback from authorities pertaining to that, the possibility of measures kicking in remains as the upcoming summer holidays in Japan will pose further risks of virus spreads.
    Japan 225: Improved risk sentiments driving a break above trendline resistance
    The improved risk sentiments have led the Japan 225 index to break above a confluence of resistance at the 27,000 level, where a downward trendline coincides with a key 38.2% Fibonacci retracement level. The formation of a new higher high, following a recent higher low, seems to point towards a near-term upward bias. This comes along with improving technical indications, with the moving average convergence divergence (MACD) attempting to cross above the zero-mark. Further upside could place the 27,645 level on watch as the next stage of resistance.
     

    Source: IG charts  
    USD/JPY: Could some catch-up retracement play out?
    The USD/JPY pair seems to trade on a similar path to that of US 10-year yields, particularly since 2021 till date. This comes as Japan’s 10-year bond yield remains relatively well-anchored by its yield curve control (YCC) policy, while yield differentials with the US remains as the key driver for the currency pair. That said, the relationship seems to have gone off-course lately, as the US 10-year yields came under pressure from recession worries but USD/JPY stays resilient. Further downtick in Treasury yields could potentially drive some catching-up in USD/JPY in the form of a near-term retracement, as expectations of a 100 bp hikes in the July Federal Open Market Committee (FOMC) meeting continues to be pared back.
     

    Source: TradingView  
    On the technical front, the USD/JPY continues to trade on an upward channel, but recent moves seem to bring a retest of its upper trendline resistance. Any near-term retracement could see the 134.93 level as potential support. The persistent upside surprise in US inflation may allow the USD/JPY to retain its upward bias for now, with one to watch for any formation of a higher low for the currency pair.
     

    Source: IG charts   Yeap Jun Rong | Market Strategist, Singapore
    19 July 2022
  7. ArvinIG
    We highlight five things that investors and traders need to know on Wednesday, 28 July.

    Source: Bloomberg   Forex Indices Shares China Federal Reserve Apple Inc.  
    Wall Street stocks end win streak on China tech jitters
    Wall Street snapped a five-day win streak overnight, after yesterday’s volatility drove a drop in big-tech stocks. US listed Chinese companies plunged, dragging with them the broader tech-space, as the regulatory crackdown from Chinese authorities on its private sector forced portfolio managers to liquidate tech exposure in their portfolios. The US Tech 100 ended the night’s trade 1.21% lower, though the index did finish off the day’s lows, with investors “buying the dip” at its 20-day moving average.

    Source: TradingView Apple, Microsoft and Alphabet post mixed results
    The negativity towards US tech stocks continued after the closing bell, after Apple Inc, Microsoft Corp (All Sessions) and Alphabet Inc - C (All Sessions) delivered its quarterly results. Though all three beat earnings and revenue estimates, only Alphabet shares rallied in post market trade. Apple shares dropped after the company refrained from giving guidance and warned of slowing growth and further supply constraints. While Microsoft shares fell after the company flagged a slowdown in its Azure cloud services business.
    Australian CPI data
    Quarterly CPI dropped in Australian today, and showed a very strong result. Prices were shown to have expanded by 3.8% on annualised basis, exceeding the 3.5% consensus estimate. The reaction in markets was muted however, with the AUD/USD dropping following the data, with market participants seeing the high inflation as mostly due to temporary factors. The stronger inflation pulse is also considered unlikely to influence the Reserve Bank of Australia policy, given the major hit to future growth from the recent lockdowns in New South Wales.

    Source: ABS ASX200
    Nervousness in broader financial markets has put Australian investors on the back foot today, as Wall Street’ weak lead overnight, caused by concerns regarding China’s crackdown on its tech sector, keep investors on their toes. The Australia 200 has pulled back from record highs, in a day’s trade that has seen every sector trade into negative territory, with the IT sector unsurprisingly the market’s biggest underperformer.
    Markets turn attention to US Federal Reserve meeting
    Focus turns in markets now to tomorrow morning’s US Federal Reserve meeting, at which the central bank is tipped to keep policy unchanged. With the policy outcome all but certain, the interest in this meeting is in what the Fed says about its policy settings going forward. After last month’s so called “hawkish pivot”, market participants are looking for clues about the timing of QE-tapering and rate hikes, especially as some concern has developed in recent weeks that the US economy’s expansion could be slowing down.
    Do you have a view on the markets? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.
    For example, to buy (long) or sell (short) a variety of local and international stocks using CFDs, follow these easy steps:
    Create an IG Trading Account or log in to your existing account Enter <Company name> in the search bar and select it Choose your position size Click on ‘buy’ or ‘sell’ in the deal ticket Confirm the trade For investors not looking to trade stocks, you can invest in shares directly through our share trading service.
    Kyle Rodda | Market Analyst, Australia 
    28 July 2021
  8. ArvinIG

    Why are IAG shares falling?

    By ArvinIG,


    Analyst article
    IAG's share price has dropped some 8% in the last one week.

    Source: Bloomberg   Shares International Airlines Group Airline Market sentiment Market trend Price   IAG share price closed 4% lower on Tuesday (14 September 2021) Shares fell another 1.6% on Wednesday morning to 140 pence The airline’s stock has been steadily declining since the European Union proposed to reimpose travel restrictions on the US Despite this, 21 out of 29 analysts polled continue to rate IAG a ‘buy’ Feeling bullish or bearish about IAG shares? Open an account with us to go long or short on the stock. IAG stock price drops 8% in one week
    Shares of International Consolidated Airlines Group (IAG) fell another 4% to finish at 142.40 pence on Tuesday.
    The Anglo-Spanish airline holding company - which owns carriers such as British Airways, Aer Lingus, and Iberia - has seen its stock decline 8.3% in the last five trading sessions.
    The relentless downtrend has come amid an ongoing rout of travel stocks after European Union (EU) states said they would recommend reimposing travel restrictions on American tourists.
    EU governments agreed to remove the US from their safe travel list, following a surge in new Covid-19 cases. Airlines and travel firms had been calling for a full reopening of lucrative transatlantic routes.
    By comparison, fellow London-listed airline easyJet saw its share price plunge by over 12%, although that was also in part due to its rejection of a takeover bid by Hungarian discount carrier Wizz Air Holdings.
    Why are analysts still bullish about IAG?
    Overall, IAG shares remain in bearish territory, having lost over 13% of its market cap in the last one month alone.
    The latest market research shows that out of 29 analysts, 21 rated IAG shares ‘buy’, seven suggested ‘hold’, and one recommended ‘sell’. Their average 12-month target price stood at 230.53 pence per share, according to Bloomberg data.
    Bullish research teams with ‘buy’ or ‘overweight’ calls included Barclays with a 230p target, Liberum with a 215p target, and Credit Suisse with a 256p target. HSBC suggested ‘buy’, but cut its target to 220p, from 240p.
    Some research teams are seeing ‘attractive valuations’ for UK airline stocks, which had been volatile of late amid concerns of new travel curbs, Reuters reported.
    Credit Suisse analysts believe IAG has about four more years of cash-burn coverage and thus should not need to raise equity this year.
    However, IAG’s position ‘is heavily dependent on the transatlantic market fully reopening, meaning leverage may peak in late winter’, they wrote.
    JPMorgan maintained a long-term ‘overweight’ rating due to IAG’s ‘very low’ valuation multiples, but flagged that IAG’s recovery could be slower than expected.
    Thinking of trading IAG shares?
    Learn how you can trade IAG shares with IG.
    Go short and long with spread bets, CFDs and share dealing on MetalNRG and 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.
    * Best trading platform as awarded at the ADVFN International Financial Awards and Professional Trader Awards 2019
    Kelvin Ong | Financial writer, Singapore
    15 September 2021
  9. ArvinIG
    The Australian dollar sunk in the aftermath of the Fed’s rate rise; the RBA has signaled a less hawkish approach to monetary policy and the Fed’s jumbo hike has given USD some backbone. Will AUD/USD go lower?

    Source: Bloomberg   Forex Shares Australian dollar United States dollar Bond Inflation   Australian dollar forecast: bearish
    The Australian dollar appears captive to the machinations of the US dollar for now.
    The fallout from the Fed’s decision during the week has seen Treasury yields roar higher. This has seen the US dollar strengthen across the board with the US dollar index (DXY) jumping to a 20-year high.
    The US central bank raised its Fed funds target rate by 75 basis points as anticipated during the week, but it was the post-decision press conference that got the hawks screeching.
    Fed Chair Jerome Powell said, “we will keep at it until the job is done,” in reference to fighting sky-high inflation (8.3% year-on-year to the end of August). The market has now priced in another 125 basis points of lifts by the end of the year.
    Conversely, the less hawkish stance of the RBA was confirmed during the week with the release of the RBA meeting minutes for the September meeting.
    By in large, they re-iterated the opinion expressed recently by RBA Governor Philip Lowe that the RBA will be considering a hike of either 25 or 50 bp at their next meeting on 4th October.
    He has also said that as rates become elevated, the case for further large boosts decreases. So, while rates are being tightened, they are being done so at a slower pace than the Fed and other global central banks.
    This pace of reining in previously loose policy places the Australian dollar under pressure as yields in other developed markets rise.
    The tightening of monetary policy is to allay fears of inflation becoming entrenched. The last read of year-on-year CPI to the end of the second quarter came in at 6.1%, well above the RBA’s target of 2-3% on average over the business cycle.
    So, while price pressures are stronger than desired, they are not as pronounced as in other parts of the world, hence the less aggressive tightening stance.
    2- and 10-year bond spread yields illustrate the relative outperformance of Treasuries to Australian Commonwealth Government Bonds (ACGB). With the RBA’s dovish tilt compared to Fed, the ‘big dollar’ continues to climb, pushing AUD/USD down.
    AUD/USD against 2- and 10-year bond spreads

    Source: TradingView
    Daniel McCarthy | Strategist
    26 September 2022 13:27 This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.
  10. ArvinIG

    Roblox shares hit by Q1 losses

    By ArvinIG,


    Analyst article
    The gaming company unveiled first-quarter results last week

    Source: Bloomberg   Shares Roblox Investor Free cash flow Jefferies Group Investment   Losses at Roblox rose 16% to $161.7 million in the first-quarter from $136.1 million last year as the benefit of Covid-related bookings waned.

    However, revenues at the popular US children’s gaming platform jumped 39% in the first-quarter to $537m, compared to the same period last year ($386.9 million).

    That said, Roblox admitted it expects to post losses “for the foreseeable future” even as it anticipates “generating net cash from operating activities”. Shares in the gaming company fell 4% on the day of results, although they recovered some ground on Monday.

    "We remained focused on delivering our innovation roadmap to unlock the full potential of the Roblox platform and drive long-term returns for investors," David Baszucki, Roblox’s chief executive officer told investors. "Over the past two quarters, we have launched a number of notable innovations, including spatial voice and layered clothing that will continue driving user growth, engagement and monetization."
    Roblox’ Covid fillip wanes
    Hours engaged increased by 22% to 11.8 billion from the same period in 2021, while daily active user numbers rose by 28% to 54.1 million in the quarter. Roblox says two-thirds (77%) of its users hail from outside North America, while users aged over 13 increased by 38% year-on-year and accounted for over half of daily active users.
    However, bookings in the first-quarter fell 3% to $631.2 million due to tough comparative figures in the same period last year when stronger Covid restrictions were in place. These figures were lower than analysts had forecast.
    In the first-quarter, free cash flow stood at $104.6 million, while earnings before interest, tax, depreciation and amortisation fell to $67.9 million. Management says both figures fell “significantly” compared to last year as the company invested in headcount, infrastructure and developer expenses but bookings remained flat.

    Riding the Metaverse wave
    Roblox looks set to continue its investment going forward and is focusing heavily on the metaverse, which management believe is “an uncommon opportunity”. Indeed, the company told investors in its shareholders’ letter that it thinks this “new form of communication” will change how people connect with each other and that over the long-term, the opportunity is ultimately “potentially larger and more profound” than other innovations in social networking.

    Analysts at broker Jefferies raised their second-quarter earnings forecasts to losses of -$0.25 per share (from $0.30 a share). They currently have a $50 price target on the shares.

    Roblox shares are down 51% in the past year to $34.39 and remain well off their highs of $141.60 seen in November 2021. They could travel the crest of the metaverse wave and many other US companies, such as Meta and even Wendy’s, are investing heavily in the virtual world. However, with losses likely to continue for some time, it’s unclear when the shares may receive a much-needed short-term boost.

    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).

    Piper Terrett | Financial writer, London
    17 May 2022
  11. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 12th July 2021. 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 AS51 BIN AU 16/07/2021 Special Div 0.117 MIB MS IM 19/07/2021 Special Div 0.3 (Estimated) RTY BCC US 14/07/2021 Special Div 2 RTY INSW US 14/07/2021 Special Div 1.12 RTY HPK US 14/07/2021 Special Div 0.075 RTY XBIT US 15/07/2021 Special Div 2.5 (Estimated) SPX EOG US 15/07/2021 Special Div 1  
     
     
    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.
  12. ArvinIG

    Uber Technologies: Q3 earnings preview

    By ArvinIG,


    Analyst article
    Uber Technologies results expected to show a smaller loss and move closer towards profitability.

    Source: Bloomberg   Shares Uber Earnings before interest, taxes, depreciation and amortization Market trend Price Profit   When are the Uber results?
    Uber Technologies, the company that connects consumers with of ride services, merchants and food delivery services as well as public transportation networks is set to report thitd quarter (Q3) 2021 earnings on 4 November 2021.
    What ‘the Street’ expects from Uber Q3 2021 results?
    In Uber’s preceding quarterly results (Q2 2021) the group has guided that it expects to reach adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) profitability by Q4 2021, and is expecting the current reporting quarter to reflect an EBITDA loss of less than $100 million.
    The current reporting quarter (Q3 2021) will have investors looking at the groups progress towards achieving profitability. Consensus estimates show ‘The Street’ to be more optimistic than Uber in terms of expecting an EBITDA loss of less than $50 million (Uber’s guidance less than $100 million EBITDA loss).
    A consensus of estimates from Refinitiv data for the upcoming Q3 2021 Uber results arrive at the following:
    Revenue for the quarter of $4.421 million (+42.1%) EBITDA loss of $47.86 million (+92.34%) Earnings per share (EPS) for the quarter of -$0.34 (+45.94%) How to trade Uber results
    In terms of an institutional view, as of 20 October 2021, a Refinitiv poll of 48 analysts have an average rating of ‘buy’ for Uber, with a long-term price target (mean) of $67.15.

    Source: Refinitiv  
    In terms of a retail trading view, as of 27 October 2021, IG Client Sentiment data shows 93% of IG clients with open positions expect the price to rise in the short term, while 7% expect the price to fall in the near term.

    Source: IG
    Source: IG charts  
    The share price of Uber currently trades within a short term range between levels 44.20 (support) and 48.45 (resistance). The longer term trend bias remains sideways as well.
    Bullish trade scenario
    Traders looking for long entry might prefer to see either a bullish price reversal closer to support (44.40) or an upside breakout of the 48.45 level (confirmed with a close above). In the event of an upside breakout, 52.00 becomes the initial upside target from the move.
    Bearish trade scenario
    Traders looking for short entry might prefer to see either a bearish price reversal closer to resistance (48.45) or a downside breakout of the 44.20 level (confirmed with a close below). In the event of a downside breakout, 39.80 becomes the initial downside target from the move.
    Summary
    Q3 2021 results are scheduled for release on 4 November 2021 Market participants will be looking for earnings to reflect an improving loss making scenario and a move closer towards profitability in the Q4 2021 Revenue for the quarter of $4.421 million is expected by ‘The Street’ A loss per share for the quarter of $0.34 is expected by ‘The Street’ The average long term broker rating for Uber is ‘buy’ The majority of IG clients with open positions on Uber expect the price to rise in the near term The share price remains rangebound in the short and long term Shaun Murison | Senior Market Analyst, Johannesburg
    29 October 2021
  13. ArvinIG

    Top 10 ASX Uranium Stocks to Watch in 2021

    By ArvinIG,


    Analyst Article
    As uranium prices hit multi-year highs, we examine ten ASX-listed companies with exposure to uranium assets.

    ource: Bloomberg   Indices Shares Uranium Share Stock Australian Securities Exchange   Uranium prices hit 5-year high in September
    Uranium prices have run wild in the last month, with the commodity trading 36.3% higher in that period, last hovering around the $44.90 mark. That marks a five year high for the often overlooked commodity, which traded below the $20 mark in 2016.
    This has corresponded to significant buying activity in global and in particular, ASX-listed uranium stocks, with the likes of Paladin Energy gaining 112% in the last month alone.
    What’s the catalyst behind this latest surge? According to IG’s Senior Market Analyst, Joshua Mahony:
    ‘This largely illiquid market has been influenced heavily by the Sprott Physical Uranium Trust, which is providing major demand into a market that takes little to move price. The sheer size of Sprott’s other precious metal trusts highlights the potential impact it could have upon uranium prices.’
    Looking ahead, Mr Mahony pointed out that that:
    ‘In total the Sprott trusts total $12 billion in funds. While the Sprott Trust is currently listed in Canada, their plan is to also post on the New York Stock Exchange. That could bring yet another bout of upside for uranium prices.’
    There are some complexities to this recent price boom that investors and traders should be aware of, with Mr Mahony noting that:
    ‘Notably, while we have seen the price of uranium jump from $34 to $42 in a very short space of time, it is argued that many producers refuse to restart operations until prices reach something close to $70.’
    Best 10 ASX uranium stocks to watch in 2021
    Despite those concerns from the production-side, as with the recent run up in iron ore prices that triggered a rally in Australian iron ore stocks, this recent bullish uranium price action has seen many ASX-listed uranium stocks surge, as investors aggressively move from trend to trend.
    To that end, the below table highlights some of Australia’s largest and most important uranium companies, ranked in terms of market capitalisation:
    Company
    Ticker
    Market Capitalisation
    Share Price*
    1-Month Performance
    Paladin Energy
    PDN
    $2.73bn
    $1.02
    +112.50%
    Energy Resources of Australia
    ERA
    $1.70bn
    $0.46
    +68.52%
    Boss Energy
    BOE
    $683.48m
    $0.30
    +87.50%
    Deep Yellow
    DYL
    $407.79m
    $1.20
    +81.82%
    Bannerman Energy
    BMN
    $385.54m
    $0.36
    +157.14%
    Peninsula Energy
    PEN
    $288.85m
    $0.30
    +130.77%
    Lotus Resources
    LOT
    $285.09m
    $0.30
    +100.00%
    Vimy Resources
    VMY
    $254.46m
    $0.24
    +118.18%
    Alligator Energy
    AGE
    $219.90m
    $0.079
    +163.33%
    Elevate Uranium
    EL8
    $167.74m
    $0.70
    +157.41%
    *Data correct as of 15 September, 2021.
    How to buy or invest in uranium stocks on the ASX
    You can gain exposure to ASX-listed uranium stocks two ways: either through share trading or derivatives trading. Share trading means that you take direct ownership of the stock, meaning you could potentially profit if the share price increases in value or if the company decides to pay a dividend.
    By comparison to owning shares outright, derivatives trading – such as CFD trading – allows you to speculate on the price movement of a company’s shares without actually taking ownership of them. CFD trading may prove attractive to some investors for a number of reasons, including the flexibility to trade stocks long and short, the ease of which it allows to hedge, as well as the ability to gain larger exposure to an asset through leverage.
    Follow the simple steps below to start investing or trading uranium stocks:
    Investing in uranium stocks
    Create or log in to your share trading account and go to our trading platform Search for the company you wish to invest in Select ‘buy’ in the deal ticket to open your investment position Choose the number of shares you want to buy Confirm your purchase and monitor your investment Trading uranium shares
    Create or log in to your trading account and go to our trading platform Decide whether CFD trading is right for you Search for the company you wish to trade Choose your position size and select ‘buy’ Confirm your trade and monitor your position Shane Walton | Financial Writer, Australia
    15 September 2021
  14. ArvinIG

    Can Nvidia shares break through resistance?

    By ArvinIG,


    Analyst article
    Analysts’ latest price targets suggest that Nvidia shares have plateaued.

    Source: Bloomberg   Shares Nvidia United States Takeover United Kingdom Price   Nvidia (NASDAQ: NVDA) shares closed marginally higher on Wednesday (01 September 2021) The US’ largest semiconductor firm continues to encounter challenges in its planned takeover of Arm Ltd The stock appears to have reached its price potential, based on the latest analyst targets Keen to trade Nvidia shares? Open an account with us to get started. Nvidia stock price: what’s the latest?
    Nvidia shares continue to inch up this week, even though its proposed US$40 billion acquisition of British chip designer Arm Ltd has found a new opponent.
    Tesla CEO Elon Musk is said to have raised competition concerns over the US semiconductor giant’s much-discussed takeover of Arm, The Telegraph reportedly last weekend.
    The UK newspaper also said that e-commerce behemoth Amazon.com Inc and South Korean smartphone maker Samsung Electronics Co Ltd have lodged opposition to the deal with US authorities.
    Nvidia is likely to seek European Union antitrust approval for the acquisition in early September, according to Reuters.
    The stock closed slightly higher on Wednesday at US$224.4 a share, which is up 20% from its split-adjusted price of US$187.
    Nvidia-Arm deal hits more roadblocks
    The Nvidia-Arm deal has not been going smoothly of late.
    UK regulator Competition and Markets Authority (CMA) said two weeks ago that the deal raises ‘serious competition concerns’ and could also require an in-depth investigation on national security grounds.
    CMA flagged that the takeover may possibly hurt rivals by limiting their access to key technologies, cause price increases for semiconductors, and ultimately stifle innovation in a number of important and growing markets.
    The chip technology sector is ‘vital’ to everyday products, said CMA chief Andrea Coscelli.
    With the European Commission set to begin investigations into the proposal, Nvidia has stated it will seek to answer ‘any concerns’ regulator there might have.
    What’s your view on Nvidia? Take a position on the stock today
    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.
    * Best trading platform as awarded at the ADVFN International Financial Awards and Professional Trader Awards 2019.
    Potential US government deal with AMD fuel optimism
    Nevertheless, Nvidia investors have other reasons to celebrate, as the US Department of Energy could soon ink a deal to buy a supercomputer, to be named Polaris, based on Nvidia’s A100 chips and AMD’s Rome and Milan chips.
    Polaris is slated to come online this year, and will be a test machine for the department’s Argonne National Laboratory to prepare its software for a separate Intel-based Aurora machine, Reuters reported last Tuesday (24 August).
    The US’ supercomputers do scientific work in areas including healthcare and climate research, as well as perform virtual testing of nuclear weapons.
    Nvidia shares jumped up 2% following the report.
    For now, research teams were largely positive on Nvidia’s shares, with 38 ‘buy’ calls, five ‘hold’ recommendations, and three suggesting ‘sell’. Their average 12-month target price was US$220.88, according to Bloomberg data.
    Kelvin Ong | Financial writer, Singapore
    02 September 2021
  15. ArvinIG
    A successful Openreach fibre rollout, falling costs, and a new experienced Chairman could send the telecoms giant to new highs. But overall revenue for H1 FY22 fell by 3%. So what's next for BT?

    Source: Bloomberg   Shares BT Group Openreach Investor Stock Price   With over 30 million customers, BT (LON: BT.A) is the largest consumer broadband provider in the UK. But the FTSE 100 firm is a surprisingly volatile stock. Five years ago, its share price was 361p. A year ago, it was 99p. It hit a 12-month high of 205p on 17 June, before sinking to 136p by 22 October. However, it's now risen back to 150p. And the positive indicators from its H1 FY22 results today could mark the start of a new bull run.
    Where do you think the BT 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? BT share price: H1 FY22 results
    The most important announcement for most investors is the reintroduction of dividends. BT had previously paused the payments to help fund an expansion of its Openreach network. An interim dividend of 2.31p is now expected, with further dividends to come from now on.
    CEO Philip Jansen said BT’s dividend policy would be funded by an expansion by 2030 of at least ‘£1.5 billion in normalised free cash flow compared to FY22, and that’s before any benefits from increased revenue and further transformation efficiencies.’ And the company’s so confident of continued success, it’s brought forward its FY25 target of £2 billion gross savings to FY24. This optimistic outlook is good news for long-term investors.
    In addition, ten communications providers, including Sky and TalkTalk, have signed up to long-term contracts with Equinox, BT’s ‘Fibre To The Premises’ (FTTP) pricing offer. Openreach FTTP has now been expanded into almost 6 million homes, while average build costs have fallen to £250-£350 per premises. And encouragingly, it’s decided not to bring on any partners to help expand the project. Moreover, Openreach delivered its best-ever H1 for repairs, with 87.1% of customers back online within contracted times. This has led to customer turnover nearing record lows.
    On the other hand, revenue fell 3% to £10.3 billion compared to H1 FY21. In addition, increased finance expenses hit profit, which fell 5% to £1 billion. BT blamed supply chain issues hitting stock levels. To be fair, it’s far from the only company with this issue.
    But its EBITDA of £3.748 billion was up 1%, as the revenue decline was offset by tighter cost management. And while free cash flow of £360 million was down 15%, this can be ascribed to increased capital expenditure on developing the Openreach network.
    Jansen commented that ‘these results demonstrate an acceleration of pace in transformation of BT. We are creating a better BT for our customers, the country and our shareholders.’
     
    Start trading BT shares
    Source: Bloomberg A brighter future?
    BT has also acquired a new Chairman, Adam Crozier. Appointed as CEO of Royal Mail in 2003, he inherited a business that was losing £1 million a day. Seven years later, it was back in profitability. Then at ITV, he spent hundreds of millions expanding its TV production arm, which saw its share price quadruple during his tenure. His experience of balancing shareholder demands, OFCOM, and government politics should stand him in good stead in his new role. And the rumoured acrimonious relationship between CEO Jansen and former Chairman Jan du Plessis can now be laid to rest.
    It’s also worth remembering that Patrick Drahi’s Altice became BT’s biggest shareholder back in June, after spending £2.2 billion on a 12.1% stake. This move from the billionaire telecoms investor is another positive sign for BT’s long-term future.
    For all the good news, some perspective is important. BT’s revenue did fall compared to the same period in the last financial year. Moreover, surging inflation might dampen consumer demand for premium broadband products. And the company’s £15 billion market cap is less than half of what it was five years ago. But for some investors, today’s results might be a sign of things to come.
    Start trading now
    Charles Archer | Financial Writer, London
    05 November 2021
  16. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 25th July 2022. 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
    N/A
        Special Div
       
    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.
  17. ArvinIG
    The pandemic has brought both disruption and innovation to the cosmetics and beauty industry, plus unique opportunities for traders and investors. Check out some attractive cosmetics stocks to buy, short and invest in now.

    Source: Bloomberg   Shares Cosmetics Estée Lauder Companies Coty Inc. Unilever Brand   What's on this page?
    1. Five cosmetics and beauty stocks to watch                                                       2. How to trade or invest in cosmetic stocks
    3. What you need to know about the cosmetics and beauty industry   Five cosmetics and beauty stocks to watch
    Unilever Kao Corporation Coty Inc. L'Oréal SA Estée Lauder  
    Unilever
    London Stock Exchange (LSE) listed powerhouse Unilever is perhaps not the first name you’d associate with cosmetics. However, in 2017, it created a new company called Unilever Cosmetics International, housing some of the company’s beauty brands, including Tom Ford fragrances and Calvin Klein fragrances and cosmetics.
    Unilever also has under its umbrella the Prestige Group, a subdivision for other higher-end cosmetics brands, including Dermologica, Living Proof and Kate Somerville. It also owns Dove, Axe and Brut, making the company a force to be reckoned with in the fragrance space as well.
    During the first quarter (Q1) of 2021, the company’s beauty products category grew by 2.3% and, interestingly, the Prestige Group showed strong sales as the self-care trend swept a self-isolating globe. This was on top of Unilever already reaching its pre-pandemic sales growth figures by the first week of February, weeks before the end of Q1 2021.1
    Unilever has also announced that it aims to increase future profits by spending over €1 billion in various strategies, such as the very on-trend expansion of its cruelty-free, plant-based beauty products.
     
    Trade Unilever
    Kao Corporation
    Japanese company Kao Corporation is one of the biggest beauty and cosmetics players in the world, owning well-known brands such as Kanebo, Bioré, John Frieda, Molton Brown and more. Much like Unilever, the business is well known for its bullish acquisition of cosmetics brands. However, Kao is even more storied, tracing its roots all the way back to 1887.
    With its mighty market cap of over ¥29 billion, Kao outstrips even Unilever in size. This didn’t shield the company from having a rocky 2020 though, with revenues of its cosmetics business dropping over 22% compared with financial year 2019 (FY2019).2 The company also has a sizable Kao Salons division, which also suffered in the wake of the year’s quarantines. However, Kao’s many other businesses, especially those producing hand sanitisers and home cleaning items, bolstered its performance.
    Kao Corporation has said it’s putting a significant investment into its cosmetics business, despite 2020 losses, and in particular is overhauling its ‘digital offering’. This is to make a compelling new e-commerce functionality available – a move sure to be greeted with enthusiasm by an increasingly online shopping world.
    Another thing that bodes well for Kao is its often pioneering social conscience, with its zero carbon dioxide (CO2) emissions by 2040 plan and being one of the world’s most ethical companies for the fifteenth year in a row.2 Research has shown this to be vital for the very influential Generation Z consumers, a fact Kao seems well placed to benefit from.
     
    Trade Kao Corporation
    Coty Inc.
    American fragrance, hair and cosmetics conglomerate Coty Inc. is home to a number of brands, famous for owning Kylie Cosmetics, Rimmel, Wella, CoverGirl, Clairol, Max Factor and more.
    Coty’s recent results show a disruption from Covid-19, due to the decreased use of cosmetics and fragrances with the prevalence of self-isolation. Its latest results show an overall decrease in revenues of 3.3%, including a mass net decrease in sales of 14.3%. However, the company’s e-commerce business and Asia sales rose over 30%, plus prestige brands showed a 6.5% increase in revenue.3
    Partially, this was due to the company owning the license for Burberry fragrances and cosmetics. While Burberry’s fashion line took a predictable beating from the pandemic, its 2021 Q1 results showed the company’s beauty sales, under the division of ‘children’s, beauty and other’, reported an increase from £127 million in 2019 to £144 million in 2020.4
    Coty has also said that it expects to end the summer with net revenues somewhere between $4.5 billion and $4.6 billion, plans for which include a high-profile relaunch of Kylie Cosmetics.
     
    Source: IG charts Trade Coty Inc
    L'Oréal SA
    L'Oréal is a name that needs no introduction, the French cosmetics and hair care giant is more than a 110 years old.
    The beauty brand showed its staying power in its latest results, going from a 4% drop in overall sales figures in 2020's Q1 to a 10.2% increase in 2021's Q1, mostly from skincare lines like Lancôme and Kiehl’s. However, most impressive in these results is a glamorous 47% increase in e-commerce sales over the same period, , as digital shopping becomes increasingly popular.5
    The company seems keen to keep this momentum going, with recent releases announcing new eco-refill packaging. There are also plans to capitalise on its 2018 acquisition of the beauty and fragrance arm of fashion house Valentino, with a roll-out of new Valentino stores in the US. L'Oréal seems well placed to continue to give its shareholders dividends.
     
    Trade L'Oréal SA
    The Estée Lauder Companies Inc
    One of the oldest and largest US beauty brands, The Estée Lauder Companies Inc owns many of the world’s most famous cosmetics and fragrance names, from Clinique to Tommy Hilfiger, Jo Malone, Bobbi Brown, La Mer and, of course, the eponymous Estée Lauder.
    The company’s latest results of 2021's quarter three (Q3) showed a profit of $456 million, compared with a net loss of $6 million in the same quarter in 2020. This was largely due to an increase in sales for Estée Lauder, La Mer, Jo Malone London, Clinique, and Tom Ford cosmetics, as well as double-digit growth for these in Asia specifically. Both earnings and sales figures were ahead of analysts’ expectations and forecasts were rosy. The company forecasted a net sales increase of 11% to 12% for 2021.6 Reported diluted net earnings per common share are also projected to be $5.48, approximately.
     
    Trade Estée Lauder Companies
    How to trade or invest in cosmetics stocks
    Research which beauty and cosmetics stocks you want to trade Carry out analysis on that stock – both technical and fundamental Practise your trading strategy with an IG demo account, or create a live account and start trading cosmetics stocks on our award-winning platform7 You can invest in US stocks commission free and UK stocks from as little as £3 with our share dealing service,8 or trade on their prices using spread bets or CFDs.
     
    What you need to know about the cosmetics and beauty industry
    Cosmetics stocks is a broad term for companies selling makeup, toiletries, hair products, perfumes and even feminine hygiene products. It’s a huge industry, estimated to be worth over $500 billion globally.
    Cosmetics is a small pond, with the vast majority of brands all belonging to a handful of ‘parent companies’. These include The Estée Lauder Companies, L’Oréal and Coty.
    Cosmetics stocks have had a mixed bag in 2020 and 2021, with some performing well while others were disrupted by the pandemic. Traditionally, cosmetics stocks are governed by the so-called ‘lipstick index’. This means that, in tough economic climates, certain luxury items such as lipstick will do well as people ‘treat’ themselves with smaller items, while cutting back on larger splurges like holidays. The pandemic certainly caused a dip in lipstick sales, as surgical and cloth masks became the norm, but caused strong growth in other cosmetics such as eye makeup and skincare.
     
    Best cosmetics and beauty stocks summed up
    Some beauty stocks have suffered during the pandemic, including makeup brands and salons. Others, like self-care stocks, luxury skincare and hair care, have flourished in the stay-at-home environment Many beauty stocks have recovered from the disruption of the Covid-19 pandemic and are reporting, or forecasting, a rise in profits during 2021 so far The big parent companies of the beauty stocks world look well placed to make good revenues (and returns for investors) for 2021 and 2022 You can invest in cosmetics stocks with our share dealing service, or speculate on their prices using spread bets or CFDs  
    Sources
    1 Reuters, 2021
    2 Kao Corporation, 2021
    3 Burberry Group, 2021
    4 Beauty Packaging, 2021
    5 L'Oréal SA, 2021
    6 Yahoo Finance, 2021
    Footnotes
    7 Awarded ‘best finance app’ and ‘best multi-platform provider’ at the ADVFN International Financial Awards 2020
    8 Deal three or more times in the previous month to qualify for our best commission rates.
    Katya Stead | Financial Writer, Johannesburg
    02 August 2021
  18. ArvinIG
    The Australian dollar may have to deal with a relatively dovish RBA; unterest rate differentials and commodities are working against the Aussie and if the Fed kicks in a jumbo hike this week, will AUD/USD go lower?

    Source: Bloomberg   Forex Commodities Federal Reserve Australian dollar AUD/USD United States   The Australian dollar appears captive to US dollar gyrations for now. US dollar movements look to be driven by Treasury yields. Treasury yields seem to be driven by the actions of the US Federal Reserve.
    So, to understand where the Aussie dollar might be headed, it could be worthwhile to have a grasp of what the Fed is up to.
    While the RBA is copping flak for increasing interest rates 225 basis points (bp) from the pandemic low, their US counterpart has lifted their cash rate by the same amount. The key difference is rhetoric about rates going forward.
    On Friday, RBA Governor Philip Lowe reiterated his opinion that as rates become elevated, the case for further large boosts decreases.
    He stated that the RBA will be considering a hike of either 25 or 50 bp at their next meeting on 4th October. The tightening of monetary policy is to calm a rising tide of inflation. The last read of year-on-year CPI to the end of the second quarter came in at 6.1%.
    On the other side of the Pacific Ocean, Fed Chair Jerome Powell is facing choppier waters. Headline inflation there is at 8.3% year-on-year to the end of August, and he has made it clear that the central bank will continue to tighten aggressively.
    The reaction by markets to the release of US CPI illustrates the importance of the Fed’s policy for global markets.
    AUD/USD reactions to data

    Source: TradingView A Bloomberg survey of economists is forecasting a 75 bp hike at the Federal Open Market Committee (FOMC) meeting this Wednesday. The market has fully priced this in and has an off chance of 100 bp.
    With short-end rates tilting north, this has moved out and along the respective government yield curves.
    Looking at the spread between Treasury and Australian Commonwealth Government Bond (ACGB) yields in the 2- and 10-year part of the curve, the increase in correlation is observable over the last few months.
    AUD/USD against 2- and 10-year bond spreads

    Source: TradingView While all of this is playing out, the fundamental backdrop for the Australian dollar remains strong, as shown by jobs data released last week. While the August unemployment rate nudged higher to 3.5% against the 3.4% forecast and prior reading, it is still near multi-generational lows.
    The overall change in employment for the month was 33.5k instead of 35k anticipated. Full-time employment increased by 58.8k, while 25.3k part-time jobs were lost in August.
    The participation rate printed as expected at 66.6% but higher than 66.4% previously. This data is on top of healthy GDP and trade numbers from the prior week.
    Commodity prices have been volatile and have softened with a stronger US dollar. The market perception is that global tightening of policy will eventually lead to a slowdown in growth and less demand for raw materials.
    The prospect of a slowdown in economic activity has seen equity markets take a bath and the ASX 200 is not immune. In a risk-off environment, the growth and commodity-linked Aussie is vulnerable.
    The Fed decision is on Wednesday and it is shaping to be a crucial data point for AUD/USD.
    AUD/USD against copper, ASX 200, iron ore, and gold

    Source: TradingView   Daniel McCarthy | Strategist, DailyFX
    19 September 2022 This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.
  19. ArvinIG
    With world economies slowly emerging from the devastation wrought by the pandemic, we look at some of the industries that could play a key role in the recovery, and pick five stocks to keep an eye on.

    Source: Bloomberg   Indices Shares Commodities Investment Compass Group National Express  
    What's on this page?
    1. Recovery investment trends                                       2. What industries are shaping the economy reopening? 3. Top 5 recovery stocks: our analysts’ choice           4. How to trade or invest in recovery stocks Recovery investment trends
    According to our chief market analyst, Chris Beauchamp, a key phrase to keep in mind when thinking about recovery stocks is ‘a return to normality’. Overall, the argument is that as the dust settles from lockdowns, market uncertainty and immense supply chain disruptions, the pre-Covid patterns of demand may begin to re-establish themselves.
    Additionally, governmental stimulus packages in influential economies – like the US and those of Europe and Asia – will likely spur investor and consumer spending. This could result in an increased aggregate demand for goods and services.
    What industries are shaping the economy reopening?
    Although by no means an exhaustive list, the following industries could benefit from the much-anticipated lifting of restrictions:
    Mining: as aggregate demand begins to pick up, economies will consume higher amounts of input materials Banking: in combination with government stimulus packages, renewed consumer and investor confidence could lead to an increased demand for banking products and services Catering and support services: with people returning to work and countries reopening to public gatherings and events, the hospitality and support industry could once again see strong returns Alcoholic beverages: eased restrictions around alcohol sales and venues will likely result in a surge in demand – most especially in emerging markets Transport: while commuter travel should intensify as normal work routines begin to re-emerge, travel for the purposes of tourism may also see a period of growth as people are once again allowed to travel freely within national boundaries
    Source: IG Charts Top 5 recovery stocks: our analysts’ choice
    We asked our market analysts for their top picks for economic recovery stocks. In keeping with the industries that are set to contribute to a return to normality, the following are candidates for consideration:
    BHP Group Barclays Compass Group AB InBev National Express Group You can trade all of the above recovery stocks with us. To get started, open an account and search for your chosen company on our world-class platform.
    BHP Group
    BHP is one of the world’s largest mining firms. It’s a dual-listed company, meaning that while conducting business as a single operation and having identical boards, the Australian BHP Group Limited and the British BHP Group PLC are listed separately – and owned by different shareholder bodies.
    BHP Group PLC has a primary listing on the LSE, while BHP Group Limited has a primary listing on the Australian Securities Exchange (ASX). The group specialises in major commodities, including iron ore, metallurgical coal and copper. It also has interests in oil, gas and energy coal.
    The mining powerhouse faced several challenges in the early stages of the pandemic – notably the decline in demand owing to worldwide lockdowns and supply constraints resulting from interruptions to operations. Despite these challenges, however, BHP earned roughly $8.3 billion in profits over the 2019/2020 fiscal year.
    In addition to several positive performance indicators – for example a one-year return of 31.85%1 – the company’s dividends have also increased substantially: the September 2020 final dividend payment of 42.11p rose to an interim dividend of 72.99p in March 2021.2
    What do our analysts think?
    Beauchamp notes that with economies kicking into full-scale recovery mode, demand for basic resources is set to gain momentum, especially in resource-hungry and industrialised countries.
    Start trading BHP Group shares
    Barclays
    While headquartered in London, Barclays is a multinational bank operating two divisions: Barclays UK and Barclays International. The bank is regarded as one of the world’s most powerful transnational corporates, and has come to play an integral role in the functioning of the global financial system.
    The bank listed on the LSE in 1953 and, with a market cap of just under £28.5 billion, is a constituent of the FTSE 100. Barclays UK consists of personal banking, business banking and Barclaycard consumer businesses, while Barclays International consists of a corporate and investment bank, and card, consumer and payment businesses.
    Owing to the pandemic-caused decline in global economic activity, Barclays stock fell from a share price approaching the mid-180p range in early 2020, to just above the 80p mark in late March 2021. With a one-year return of 51% at the time of writing, and a share price that has recovered to pre-pandemic levels, Barclays seems to have weathered the storm.1 But, more good news could be in store.
    What do our analysts think?
    Beauchamp suggests that banks – like Barclays – with high levels of international exposure to US, European and Asian markets, are in a good position to capitalise from government stimulus packages.
    Start trading Barclays shares
    Compass Group
    A multinational food, hospitality and support services provider headquartered in the UK, the Compass Group operates in 45 countries. It’s the largest contract food service company in the world, servicing five key sectors: business and industry; health and senior care; education; sports and leisure; and defence.
    The group was admitted to the LSE in February 2001, is a constituent of the FTSE 100, and has been listed as a Fortune 500 company. As could be expected however, with offices, factories, schools, universities, sports grounds and public spaces being closed during lockdown – and only recently reopening once again in the UK – the Compass Group has been severely impacted by the Covid-19 pandemic.
    Reports indicate that in the wake of the outbreak, profits declined by approximately 78%, and the group had to lay off 7000 workers. However, the Compass Group still enjoys a large market cap of £26.8 billion, and its one-year return of 35.56% suggests that it’s recuperating.1
    Group chief executive, Dominic Blakemore, has noted that as of May 2021 already, Compass Group has seen an increase in its first time outsourcing rate, and a 20% rise in the acquisition of new accounts when compared to a pre-pandemic benchmark.
    What do our analysts think?
    Beauchamp points out that catering and support service providers now face the opportunities presented by a reopening economy – including the catering needs of a large population eager to return to normal day-to-day living.
    Start trading Compass Group shares
    AB InBev
    Anheuser-Busch InBev SA/NV (known as AB InBev) is one of the world's leading producers of beers. It has 630 beer brands, and enjoys a strong market presence in over 150 countries.
    Considered one of the largest fast-moving consumer goods (FMCG) companies globally, AB InBev resulted from a merger between the US-based Anheuser-Busch and InBev – itself a merger between the Belgian Interbrew and the Brazilian AmBev.
    The group focuses on two core sectors:
    The production of beers, including: Budweiser, Corona, Stella Artois, Beck's, Leffe, Hoegaarden, Castle, Castle Lite, Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, and Sedrin The production, bottling and sales of alcohol-free drinks, including: soft drinks, malt beverages, bottled waters and ice teas Importantly, it’s net sales are distributed around the world, with a large portion concentrated on North, Central and South America (about 72% combined). The company has a primary listing on the Euronext Brussels, and secondary listings on the Johannesburg Stock Exchange (JSE), the New York Stock Exchange (NYSE) and the Mexico City Stock Exchange (Mexbol).
    Amid the mass restrictions on pubs, restaurants and retail alcohol sales worldwide, AB InBev’s share price dropped from highs of around €75 in December 2019 to lows of under €30 in March 2020. As of July 2021, this has recovered to the €60 range – leaving room for further improvement as market demand in emerging markets picks up.
    What do our analysts think?
    Eased restrictions around alcohol sales and venues will likely result in a surge in demand – most especially in emerging markets.
    Start trading AB InBev shares
    National Express Group
    National Express operates bus, coach, train and tram services across the UK, Ireland, Germany, Spain, Portugal, the US, Canada, Morocco and Bahrain. It also provides long-distance coach services in Europe. The company was admitted to the LSE in April 1995, is a constituent of the FTSE 250, and currently has a market cap of just over £1.6 billion.
    After seeing an 80% decline in passenger numbers in 2020 due to travel bans, the carrier suffered a £445 million loss for the year – down from a pre-tax profit of £187 million in 2019. It’s been reported that National Express was forced to temporarily lay off, or furlough, close on 40,000 employees across the business during the peak of the pandemic.
    CEO, José Ignacio, has said that the operator should emerge from the pandemic ‘learner, fitter and financially stronger’ owing to the steps taken to endure the impact of travel restrictions. At the time of writing, the National Express share price, although much recovered from April 2020 lows – and showing a one-year return of 57.7% – still has ground to gain on its 2019 levels.1
    In June 2021, the group announced the acquisition of Transportes Rober (Rober) in Spain for a headline consideration of €13 million.
    What do our analysts think?
    With the lifting of the lockdown restrictions in the UK, Beauchamp argues that the tourism industry within national boundaries could experience an uptick in demand. Importantly, the anticipation of increased demand could result in positive investor sentiment and an upward trending share price.
    Start trading National Express shares
    How to trade or invest in recovery stocks
    With us, you can either invest in recovery stocks, or trade them long or short.
    When investing, you’ll use one of our share dealing accounts to buy shares outright. You’ll also receive any dividends if the company grants them.
    When you trade stocks, you do so with derivatives such as CFDs. You won’t own the stock, but you can use leverage to open a position while putting up just a percentage of the capital.
    It’s important to bear in mind, however, that leverage will amplify both your profits and your losses, and that you could lose more than your deposit. You should never risk more than you can afford to lose, and always take steps to manage your risk.
    With CFDs, you won’t have to pay stamp duty and can offset any losses against profits for capital gains tax.3
    How to trade recovery stocks
    Create an account or Open MyIG Choose CFDs and search for your opportunity Select ‘buy’ to go long, or ‘sell’ to go short Set your position size and take steps to manage your risk Open and monitor your position How to invest in recovery stocks
    Create an account or Open MyIG Search for the recovery stock you’d like to invest in Select ‘buy’ in the deal ticket (you can only go long when investing) Choose the number of shares you want to buy Open and monitor your position Best recovery stocks summed up
    Investment trends for recovery stocks could centre on a ‘return to normality’ – ie, patterns of economic activity that resemble those found pre-Covid-19 Industries that stand to benefit from this normalisation include: mining, banking, catering and support services, alcoholic beverages, and transport Whereas thematic investing can yield positive results, sound investment always relies on thorough analysis, good research and the correct management of risk Stocks to consider from within each of the above industries include: BHP Group, Barclays, Compass Group, AB InBev and National Express With us, you can trade recovery stocks using CFDs, or you can invest in them by opening a share dealing account Footnotes:
    1 London Stock Exchange, 9 July 2021
    2 BHP dividends information, 9 July 2021
    3 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

    Timothy Joubert | Financial Writer, Johannesburg
    16 July 2021
  20. 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
  21. ArvinIG
    Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 23rd May 2022. 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.
     
     
    Index
    Bloomberg Code
    Effective Date
    Summary
    Dividend Amount
    N/A
        Special Div
       
    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.
  22. 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
  23. ArvinIG

    Is Nvidia worth buying now?

    By ArvinIG,


    Market News
    The largest chip maker in the US saw its shares decline despite a trio of price target upgrades this week.

    Source: Bloomberg   Shares Nvidia United States Price Market trend Stock   Nvidia Corp (NASDAQ: NVDA) share price ended 2.3% lower on Thursday (08 July 2021) This trailed the S&P 500, which finished the day 0.86% lower The stock’s decline was also despite bullish price revisions newly issued by Truist, Oppenheimer and KeyBanc analysts Interested to trade NVDA shares? Open an account with us today to get started. Nvidia stock price: What’s the latest?
    Nvidia shares closed 2.3% lower on Thursday, despite new price target upgrades.
    Truist Securities analyst William Stein was much more bullish in his latest investment thesis, lifting his firm's price target on Nvidia to US$910 from US$768 previously, while maintaining a ‘buy’ rating on the shares.
    The analyst wrote that the data centre end market is likely to ‘continue to grow rapidly’, based on an analysis of sector trends.
    Stein also increased his 2022 earnings per share estimate for Nvidia to US$18.13 from US$17.08 in his latest note published earlier in the day, citing an analysis of the company’s software monetisation figures.
    Finally, he believes that the chip maker will remain a leader in parallel computing solutions, which will continue to drive its long-term structural growth.
    How do other analysts view NVDA shares?
    Oppenheimer’s equity research team also raised its price target on NVDA to a much more optimistic US$925 from US$700 before, alongside an unchanged ‘outperform’ call.
    Analyst Rick Schafer predicts that Nvidia, along with other semiconductor stocks, are likely to beat analyst estimates in the upcoming quarters, as sectoral demand remains strong across the board.
    KeyBanc analyst John Vinh was the most bullish of the lot, raising his firm’s price target to US$950 from US$775.
    He maintained an ‘overweight’ recommendation on the shares, citing a recent confirmation that gaming demand remains robust and has not been inflated by cryptocurrency mining trends.
    The stock has rallied 14.7% in the last one month. The latest analyst sentiments published by MarketBeat show a consensus rating of ‘buy’ and price target of US$720.32 on NVDA.
    The price target equates to a potential 9.5% downside from the counter’s last traded price of US$796.11.
    Nvidia’s ARM takeover deal gets boost
    Nvidia shares rallied 3.5% after three of the world’s largest chip makers publicly endorsed its proposed US$40 billion acquisition of UK-based semiconductor group Arm Ltd.
    They included Nvidia’s US rivals Broadcom Corp. and Marvell Technology, Inc., as well as Taiwan-based MediaTek Inc.
    That update saw Citi analyst Atif Malik raising the success probability of the ARM acquisition deal to 30% from 10% previously.
    The analyst said that the news is a ‘big step forward’ and that UK authorities will probably end up approving the deal because of Nvidia’s commitment to investing more into Arm.
    However, Malik believes that China is less likely to approve the deal and that the ‘path remains narrow’, as it could potentially hurt their access to Arm.
    How to trade Nvidia shares
    Take your position on US 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 US shares commission-free with us.
    Whether you trade or invest, you’ll get access to pre-market and after-hours trading on 70 US stocks.
    Open an account to get started.

    Kelvin Ong | Financial writer, Singapore | Publication date: Friday 09 July 2021 21:36
  24. ArvinIG

    Where next for the Whitbread share price?

    By ArvinIG,


    Analyst article
    CEO Alison Brittain strikes a positive tone as the FTSE 100 hotelier and restauranteur plans its recovery. But Whitbread shares remain 34% below their pre-pandemic point. And an inflationary spiral is not off the table yet.

    Source: Bloomberg   Indices Shares Whitbread Inflation Premier Inn Hotel   The Whitbread (LON: WTB) share price is volatile. Between 21 February and 25 September 2020, the FTSE 100 stock fell 57% to 2,062p, as lockdowns took their toll on the hospitality operator.
    It had recovered to 3,595p in March 2021, before falling to 2,837p on 19 July, ‘Freedom Day.’ It then rose to 3,426p in the run up to Bonfire Night on 5 November, as investors and customers alike started to believe that the worst of the covid-19 pandemic had been spent.
    But as Omicron broke out and the disease lingered on, Whitbread shares fell to a low of 2,713p by mid-December. However, as hospital admissions fall, they have recovered to 3,135p as investors glimpse a future where coronavirus is placed firmly in the rear window.
    Whitbread share price: Q3 FY22 results
    Unfortunately for the FTSE 100 operator, yesterday’s trading update saw shares dip 3.7% to 3,135p, as it compared this quarter’s growth with the same period two years ago, due to the pandemic creating an inaccurate comparable.
    However, CEO Alison Brittain believes ‘Q3 represented another strong performance in the UK… we will grow through the competitive advantages of having by far the largest network of hotels and operating the number one hotel brand.’
    The Premier Inn owner reported ‘continued market outperformance in the UK’ with Premier Inn accommodation sales up 10.6% driven by ‘strong leisure demand and recovering business demand.’ And encouragingly, the company expects hotel like-for-like Revenue Per Available Room (RevPAR) run rates to recover to pre-pandemic levels this year. Moreover, it’s operating on a positive cashflow basis, with net cash of £120.5 million.
    And its 32 open German hotels were at 59.9% occupancy, up from 47.5% in the previous quarter. However, the group cited ‘government lockdown restrictions’ in the latter six weeks of the period driving occupancy levels down to 36%. And while the company expects restrictions to last throughout the winter, it still expects ‘significant long-term value creation opportunity for Premier Inn in Germany,’ as 43 more hotels remain in the pipeline.
    But as total UK sales rose 3.1%, food and beverage sales fell 11.1% as renewed uncertainty deterred customers from its Beefeater and Brewer’s Fayre offerings.

    Source: Bloomberg Where optimism meets inflation
    Whitbread is planning for a widespread post-pandemic recovery. It’s not alone in this regard— after excellent results this week, Sainsbury's, Tesco and Marks & Spencer's are all bullish for the future. But these optimistic outlooks may yet collide with inflationary mathematical reality.
    Whitbread expects a sector inflation rate in FY23 ‘above average historic levels’ at around 7-8%, impacting £1.4 billion of its cost base. But it admits that ‘visibility remains limited,’ and that ‘this level of inflation may well change.’ And while it expects to be able to ‘largely offset’ inflationary pressures through cost efficiencies, estate growth and raising room rates, inflation may soon spiral further than it estimates.
    The UK is experiencing a significant cost-of-living crisis. Gas bills are expected to rise to £2,000 a year, with British Gas CEO Chris O’Shea believing that ‘high gas prices will be here for the next 18 months to two years.’ With taxes rising amid 5% inflation, Whitbread’s customers may be unable to utilise its hotel rooms and restaurant tables, especially if it plans to increase prices.
    Moreover, Brittain acknowledged that inflation is hitting the company on multiple fronts, accepting that labour costs are ‘quite a large part of inflation for us, so are energy bills which are highly inflationary…construction costs are higher.’ In the face of a hospitality staffing crisis, it’s already awarded a 5% pay rise to most employees. But so has its competitors; sandwich chain Pret a Manger has raised pay twice in just four months.
    And the pandemic is not over. 10% of Whitbread’s 30,000-strong workforce are off work due to Omicron. While the company’s policy to pay 80% of salary through isolation periods is laudable, it’s also expensive. Companies from Ikea to Next have updated their policies to reflect the difficult situation.
    Whitbread knows the uncertainty may not resolve in its favour. Citing ‘market-wide supply chain challenges, and potentially softer trading in January and February,’ it has delayed £20 million of refurbishments.
    And while food retailers also suffer from inflationary spikes, everybody needs something to eat. But hotels and restaurants are two areas where discretionary spending can be cut back. Of course, if inflation softens and the recovery continues, the Whitbread share price may yet return to its pre-pandemic high.
    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.
    * Best trading platform as awarded at the ADVFN International Financial Awards 2021
    Charles Archer | Financial Writer, London
    14 January 2022
  25. ArvinIG
    Alibaba and Tencent’s rumoured decision to partner up could mean the levelling of the playing field for investors, according to an IG analyst.

    Source: Bloomberg   Shares Tencent Alibaba Group Big Tech China WeChat
        Alibaba Group Holding Limited (HK) share price jumped up 3.7% a day after it was reported that the company is seeking to accept Tencent’s WeChat Pay as a payment method on its e-commerce platforms Tencent Holdings Ltd share price also rallied as much as 2.8% IG analyst Yeap Jun Rong says this latest tie-up eases some regulatory concerns On the other hand, it also begs the question of whether these steps are enough to appease authorities On Tuesday, China’s antitrust regulator also approved Tencent’s proposed takeover of the country’s third largest search engine, Sogou Inc Interested to trade Alibaba and Tencent shares at just a fraction of the cost? Open a full or demo account with us today to get started. Alibaba, Tencent share price: why are they on the rise?
    Chinese technology titans Alibaba Group Holding Ltd and Tencent Holdings Ltd are reportedly considering introducing their services on each other's platforms.
    Both companies are seeking to remove restrictions that will allow Tencent's WeChat Pay to be accepted as a payment mode on Alibaba's online marketplaces - Taobao and Tmall, according to a Wall Street Journal report on Wednesday (14 July 2021).
    A day after the report, Tencent shares rallied as much as 2.8%, while Alibaba shares spiked up 3.7%.
    IG market strategist Yeap Jun Rong says that this potential tie-up implies that the landscape for China tech companies ‘may have shifted’.
    ‘Near-term, it may ease some concerns by showing that these big tech companies are taking steps to adhere to regulations, softening some regulatory risks from authorities,’ says Yeap.
    ‘On the other hand, there may be some uncertainty on whether authorities will be satisfied with just this move, or whether there may still be more to come. There will also be some uncertainty revolving around the impact to growth potential by opening up to competition.’
    Despite this air of ambiguity, Yeap is optimistic that investors do not have to avoid China’s big tech in the long run. He says that as more countries start gaining more control over big tech firms, the playing field may ultimately be levelled.
    However, in the short run, ‘investors may still be awaiting more clarity, considering that both Tencent and Alibaba are still largely in a downtrend, with a series of lower price highs and lower price lows since February’, he adds.
    Are the tides turning for China’s big tech firms?
    This latest move to collaborate comes amid an ongoing crackdown by the Chinese government on anti-competition practices among the country's top tech companies.
    In April, Alibaba was fined a record US$2.8 billion, while Tencent was one of 34 companies that was instructed to improve its problematic practices.
    Nevertheless, investors had other reasons to cheer this week.
    On Tuesday, China's anti-competition body - the State Administration for Market Regulation, approved Tencent's proposal to acquire the country's third largest search engine Sogou Inc in a private US$3.5 billion undertaking.
    Markets have been watching with bated breath on the outcome of the deal, as it would indicate where Beijing currently stands in its clampdown strategy.
    In fact, the Hang Seng Index rose 1.9% following the announcement, recording its biggest gain in three weeks.
    ‘Regulators are still considering each deal case by case and not rejecting all of them. The sentiment is not that negative now,’ Castor Pang, head of research at Core Pacific Yamaichi, told Bloomberg. ‘Any good news will trigger buying on dips in the sector.’
    What’s your call on Chinese big tech stocks?
    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.
    * Best trading platform as awarded at the ADVFN International Financial Awards and Professional Trader Awards 2019.

    Kelvin Ong | Financial writer, Singapore
    Thursday 15 July 2021

Markets

Forex

Indices

Shares

Other markets

IG services

Spread betting

CFD trading

Share dealing

Trading platforms

Web platform

Trading apps

Advanced platforms

Compare features

About Us

How we support you

What we do with your money

How does IG make money?

Professional trading

Contact us

Post topic on Community

Browse Help and Support

Education on Academy

Tweet us @IGClientHelp

UK

IG | Sitemap | Terms and agreements | Privacy | How to fund | Cookies | About IG

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

CFD accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd and share dealing and stocks and shares ISA accounts provided by IG Trading and Investments Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number 04008957), IG Index Ltd (a company registered in England and Wales under number 01190902) and IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Index Ltd (Register number 114059) and IG Trading and Investments Ltd (Register number 944492) are authorised and regulated by the Financial Conduct Authority.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

© 2003 - 2020

IG | Terms and agreements (UK) | Privacy (UK) | Cookies | Investors | Careers | Marketing partnership

×
×
  • Create New...
us