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Today's Markets: Zoom smashes expectations as markets bask in summer optimism

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June 2, 2021
  • House prices continue to surge 
  • Bloomsbury Publishing reaps rewards of remote learning as government announces £1.4bn tutoring fund 
  • Zoom smashes expectations

Summer half term in pre-covid days was a time of intense revision: GCSE and A Level participants in the final push before their exams, lower school students cramming everything they had learnt in the school year to prepare for end-of-year tests.

In 2021, summer half term looks very different. GCSEs and most of the A Levels are complete and as they were all written by individual schools, it is teachers rather than pupils who are pushing hard to get their work done this week. Lower school students who have been at home for most of the year are struggling to find things to revise. 

The government has announced this morning that they will attempt to plug the gap in students’ learning with a £1.4bn recovery fund. Head teachers have said that the 100 million hours of tutoring and additional teacher training is not enough - judging by the challenges that many parents are facing trying to get even the brightest of children to knuckle down this half team, I would agree. 

We have written before that the private sector can be a force for good in education’s much-needed overhaul and there is more evidence of that this morning in the results from London-listed Bloomsbury Publishing (BMY). The company - better known for its publication of the Harry Potter books - announced a 50 per cent increase in sales in its academic arm. Students are increasingly looking for learning materials online, “that’s a trend which doesn’t look likely to reverse,” said chief executive Nigel Newton. 

Meanwhile, Zoom (US: ZM) continues to reap the rewards of a world that is still learning and working remotely. The company reported better than expected revenues in its first quarter numbers overnight and profits up nearly ten-fold on the same period last year. It joins a long line of communications companies which continue to enjoy new workplace dynamics. 

Analysts worry that the removal of restrictions will see demand for the likes of Zoom, Workday (US: WDAY) and Okta (US: OKTA) decline, but if our office is anything to go by, remote conferencing technology remains in high demand. As long as just one employee remains working from home, this kind of technology will be needed. 

Markets start strong as UK records zero covid deaths 

The FTSE All Share is basking in the post-bank holiday sunshine. This morning’s 0.2 per cent lift follows a strong start to the new working week yesterday. 

With the sun now shining, there is a sense of optimism that Britain is returning to normal, despite fears that the new variant of the virus, which originated in India, may force the government to delay its full re-opening on 21 June. 

Yesterday, the UK reported no Covid deaths for the first time since the onset of the pandemic. But beware of trading market reactions, says Michael Taylor in this week’s column. 

Fresh blow for contrarian investing

In the funds space, the vaccine-led value rally of the last half year may have come too late for some: this morning the board of Scottish Investment Trust (SCIN) announced a review of its future investment management arrangements following years of pedestrian performance. 

It is now inviting approaches from “established fund management groups” who could take over the portfolio, though there is no guarantee the board will replace its current investment team.

The current manager Alasdair McKinnon, who last year told Oliver Telling that value investing would “never die”, has used a high-conviction, contrarian approach since taking the helm in 2015. But avoiding market leaders such as the FAANGs has taken a toll on performance. 

Read more of this morning’s top news in our blog below.