Seven Days: 4 November 2016

Anglo sale

Trimming down

A subsidiary of mining giant Anglo American has sold a host of assets in what is the latest move by a company in the sector to sell down operations it deems less important. Anglo American Platinum (AAP) said it had sold the Rustenburg mining operation, which includes three mines and other related infrastructure, to Sibanye Rustenburg Platinum Mines Proprietary for an initial 1.5bn rand (£91m) and deferred proceeds of 3bn rand to be earned over six years from 1 January 2017. AAP chief Chris Griffith said the sale would mean the group could focus on its "most competitive assets" which were higher margin. (See page 58 for more on mining.)

Missed goal

Pools sale off

It looked like an open goal but the mooted deal between Sportech and private equity firm Burlywood Capital for the former's Football Pools business has gone wide. The UK betting firm had invested money in improving the business in the past year but has been clear that a sale was a viable option. Burlywood's interest about a £97m deal, which would have involved the flotation of an Aim-traded company to house the pools in, was only announced in September but discussions have now been "terminated". The business has struggled to compete in a market increasingly dominated by online betting. A sale was contingent on Sportech's shareholder approval.

Fully protected

Robust insurance

If there's one part of the economy that remains buoyant in the wake of the Brexit vote it's insurance. Revenues at Moneysupermarket.com, the price comparison company, said it was on track for a record year after strong demand for insurance products. Sales were up 12 per cent on the same period last year at £84.9m. Low interest rates held back its money division, which includes savings accounts, but insurance and home services remained robust as did demand for credit cards. Peter Plumb, who will have headed the group for eight years when he leaves in May, said it helped more than 180,000 households switch energy supplier in its recent collective energy switch.

Shrinking assets

Tough times

The amount of money run by the world's 500 largest fund managers fell for the first time in five years with outflows of $1.4 trillion (£1.1 trillion) surpassing those recorded at the height of the financial crisis. Total assets hit $76.7tn as sovereign wealth funds pulled $46.5bn from investment managers in 2015 in a bid to shore up their oil-dependent economies. Luba Nikulina, global head of manager research at Willis Towers Watson, which compiled the data with Pensions & Investments, said the decline in global assets demonstrated the "impact of the challenging investment landscape and currency fluctuations" on asset managers. The economic slowdown has also hit performance.

Overseas shopping

Gilts snapped up

UK government bonds were snapped up in their largest amount in almost a year in September by overseas investors. Data from the Bank of England showed non-resident net purchases of gilts rose to £13.3bn in September from just £1.8bn in August. This was in spite of the pound falling to multi-decade lows against the dollar. The purchases suggest a gloomy view of the world economy as government bonds are deemed a 'safe-haven' asset, appropriate for when growth and inflation are low. Bank of England purchases of the securities as part of its stimulus package have also made the asset class attractive.

JD's share split

Sporting chance

Smaller investors will be able to better access shares in sports fashion retailer JD Sports if a proposed share split goes ahead. The shares trade above £15 each and now the group has suggested splitting each 1.25p existing ordinary share into five 0.5p new ordinary shares. The board said this would, among other things, "reduce the company's share price to a level where smaller sized dealings in the shares would be more efficient" and "may improve liquidity". The sub-division is expected to take effect prior to the next dividend payment on 6 January and the payment will be sub-divided in the same way, meaning the aggregate monetary value will not be impacted.

Chart of the week: How are UK funds doing since the referendum vote?

More robust than expected GDP growth and the weak pound have helped push UK shares near an all-time high since the country's vote in favour of leaving the EU.

This means investors in shares haven't yet felt the pain predicted to encapsulate the market post-referendum - although it's fair to say little has actually happened yet.

But with market conditions relatively benign for now, how are UK-based fund managers doing? Well, the chart below shows they're muddling along, with the average performance of the IA UK All Companies sector just below that of the FTSE All-Share index from 24 June - the day of the result - until now (27 October).

That said, there is a great disparity between the best performing fund in this period, run by UBS, and the worst-performing one, managed by Barclays. The UBS fund's overweight positions in dollar earners such as BP (BP.), Royal Dutch Shell (RDSB) and GlaxoSmithKline (GSK) have helped.

Conversely, the Barclays fund, which invests in the market via two third-party funds, is more exposed to smaller companies, which sold off more heavily after the vote and are likely to earn less in dollars.