Shares in London are flat across the board as traders weigh up hopes of trade breakthroughs against an uncertain geopolitical climate. Click here for The Trader Nicole Elliott's latest views on the markets
IC TIP UPDATES:
Barclays (BARC) has cleared its annual US regulatory stress tests, which measure systemically important banks against “a severe global recession…accompanied by a period of heightened stress in commercial real estate markets and corporate debt markets”. The tests found that Barclays’ common equity tier one capital ratios would decline to 10.1 per cent, against the 14.5 per cent buffer reported at the end of 2018. Shares in the lender are trending towards their one-year low, and our buy call is under review.
Porvair (PRV) shares rose nearly 4 per cent in morning trading after half-year results that revealed strong aerospace and industrial divisional performance against a tough market backdrop. The filtration systems specialist saw revenue rises across its three divisions, with the laboratory and metal melt quality businesses also faring well. The shares are now up 25 per cent on our January 2018 buy call, and look a reliable source of growth in an otherwise difficult time for industrial outfits. Buy.
StatPro (SOG) – a provider of cloud-based portfolio analytics and asset-pricing services for asset management companies – has announced a strategic partnership with J.P. Morgan (US: JPM). This partnership, which has an initial term of five years, will see J.P. Morgan’s data and analytics business and StatPro develop risk and performance attribution capabilities for portfolio managers through J.P. Morgan’s data and analytics platform. Shares in StatPro were up by around 5 per cent this morning. Buy.
“If you want to compete with passive, you have to beat your benchmarks,” says Polar Capital (POLR) chief executive Gavin Rochussen. “It’s that simple.” The fund manager managed to do just that in the year to March, despite a volatile period for equity markets. And in the year to date, 81 per cent of Polar’s assets under management (which stood at £14.1bn at the end of May) have outperformed their benchmarks. Pre-tax profit climbed 55 per cent, while shareholders have been rewarded with a 14 per cent hike in the final dividend to 25p. Buy.
Morses Club (MCL) has acquired Sheffield-based digital current account provider U Account, in what the door-step lender is billing as an important step in its digital strategy “to allow its customers to access credit flexibly”. The deal, which comprises an initial cash consideration of £5.8m, and a deferred consideration of up to £5m, means Morses now has an e-money banking platform, and 20,000 new current active customers. Shares in Morses are off 3 per cent in early trading – presumably because U Account expects to book an operating loss of £1.4m to £1.7m in the year to February 2020 – though we recently rated them a buy.
KEY STORIES:
Gold cracked $1,400 (£1,098) per ounce for the first time in five years at the end of last week and has held onto that level on Monday morning. The barrier was broken as tensions rise between the United States and Iran and following the US Federal Reserve flagging a future rate cut last week. Several London-listed gold miners are up over 10 per cent since the Fed’s most recent meeting, including Petropavlovsk (POG) and Hummingbird Resources (HUM). At the same time, traders went net long on silver for the first time in two months, according to the Bank of Montreal. Gold’s strength has so far not pulled silver up, with the ounce-to-ounce ratio (signalling how many ounces of silver it takes to buy one ounce of gold) sitting above 90:1 since mid-June.
OTHER COMPANY NEWS:
Chemring (CHG) has completed the sale of its military pyrotechnics business Chemring Defence UK Limited for a nominal cash consideration to PWD Group. The division was treated as discontinued in the defence company’s 2018 financial statements and was loss-making for the six months to 30 April 2019.
