Seven Days: 6 March 2020

UK manufacturing expands

But supply-chain disruption grows

In February, growth of manufacturing output in the UK accelerated to a 10-month high. The seasonally adjusted IHS Markit/CIPS Purchasing Managers Index (PMI) rose to 51.7 in February, from 50 in January – but below an earlier estimate of 51.9. Anything above 50 represents expansion. The increase came as domestic demand continued to recover amid reduced political uncertainty. But supply-chain disruptions also rapidly emerged, as the coronavirus outbreak drove a significant lengthening of supplier lead times, raw material shortages, reduced inventories of inputs, greater input costs and reduced export orders from Asia and specifically China.

Ninety One announces price range

Floating this month

Ninety One, the UK-focused asset management arm of Investec (INVP), is expected to fetch between 190p and 235p per share when its parent disposes of a 10 per cent stake in the business in this month’s initial public offering. That sale implies a market capitalisation of between £1.75bn and £2.17bn, and should raise proceeds of between £182m and £226m for Investec. Listing is expected to take place on 16 March – notwithstanding the volatile market backdrop and uncertainty. Management referred to the “long-term benefits” of the transaction.

Finablr’s profits hit

Cyber-attack and virus

Payments company Finablr (FIN) has said that profits for its Travelex foreign-exchange business will be knocked by the cyber-attack that hit it in December, and by the coronavirus outbreak. Travelex has broad exposure to airports and “travel flows”, meaning that it was, perhaps, an inevitable corporate victim of the virus. While underlying cash profits are estimated to be down by about £25m year on year on a like-for-like basis, the business’s cyber-insurance policy is expected to offset a material proportion of that decline – albeit the timing of profit recognition and receipt of the insurance recovery hasn’t yet been determined.

Supermarket sales rise

Hand sanitiser soared

Year-over-year supermarket sales have grown at the fastest rate since November last year, at 0.7 per cent over the past 12 weeks, according to Kantar. Sainsbury’s was the only large traditional grocer to increase year-on-year sales, with spend up by 0.3 per cent. Across the sector, recent news reports around coronavirus drove consumers to buy up hygiene and health products – with sales of hand sanitiser soaring by 255 per cent in February. Other kinds of liquid soap sales were up by 7 per cent, and 10 per cent more was spent on household cleaners.

Risers and fallers (%)

CMC raises guidance

Market volatility

CMC Markets (CMCX) has raised its net operating income guidance for the 2020 financial year after recent market volatility induced by the coronavirus outbreak boosted trading activity. This news came less than a week after rival platform Plus500 (PLUS) said that the group’s financial performance during the quarter to date was ahead of the prior year, after a significant increase in levels of customer trading activity. CMC said that retention of client income so far this year continued to be higher than during the first half.

Biden’s ‘Super Tuesday’ success

Challenging Bernie Sanders

Bernie Sanders had ostensibly been the favourite going into ‘Super Tuesday’ – the day that saw a group of US states decide on which Democrat they wanted to face Donald Trump in November’s presidential election. But at the time of writing, former US vice president Joe Biden had won nine out of 14 states that voted. Mr Biden was helped by the endorsement of former challengers Pete Buttigieg and Amy Klobuchar. Mr Sanders still looked likely to win in California – but, in any case, the result was good news for Mr Biden, and less good for Mike Bloomberg, who has spent big on his campaign.