Proactive Investors -
- FTSE 100 down 16 points
- UK economy returns to growth
- Sainsbury 's (LON:SBRY) investor cuts stake
BlackRock’s assets under management hit all-time high
BlackRock Inc (NYSE:BLK) kicked off America’s third-quarter earnings season on Friday with news its assets under management had hit a record US$11.5 trillion.
This came after the figure grew by US$2.4 trillion year over year, the bank reported, with net inflows totaling a record US$221 billion in the third quarter.
Adjusted operating income ticked up 26% to US$2.1 billion, with earnings per share climbing by 5% to US$11.46 over the quarter.
“Our strategy is ambitious, and our strategy is working,” chief executive Laurence Fink commented.
Shares in the Wall Street giant ticked up 0.5% in pre-market trading.
Monzo eyes £4.5bn valuation as another share sale looms
Monzo is reportedly gearing up for a secondary share sale which will value the digital bank at £4.5 billion.
Staff have been offered the chance to sell their shares in the bank, according to Sky News, with tens of millions of pounds worth of stock likely to be offered up.
Existing investors StepStone Group and the Singaporean sovereign wealth fund were said to be among those in the running to build their stakes in Monzo through the sale.
This would follow a fundraising round earlier in the year, through which Monzo issued £500 million worth of new shares, valuing it at £4.1 billion... Read more
November rate cut not set in stone after GDP picks up
Another cut to base interest by the Bank of England is by no means guaranteed after the UK economy returned to growth in August.
That’s according to Institute of Chartered Accountants in England and Wales economics director Suren Thiru, with the ONS figures having shown a 0.2% uptick after flat readings for June and July.
“These figures confirm a reassuring rally in output, as easing inflation and better weather helped return the economy to growth,” Thiru noted.
“While interest rates are still likely to fall in November, these positive figures mean it’s not quite a done deal by giving the more hawkish rate setters enough encouragement over economic conditions to hold off voting to relax policy.”
Thiru added the economy “could blow a bit hot and cold over the near term,” as growing incomes are hindered by rising caution over tax hikes in the Autumn Budget and geopolitical uncertainty.
Pound off one-month low
Sterling gained on Friday morning to take it off Thursday’s one-month low against the dollar.
A 0.12% gain saw the pound climb to US$1.3076, after a sudden reverse in expectations for further steep cuts in the US last week has weighed recently.
This has seen the pound drop from the US$1.34 mark since late September.
Analysts warned Friday’s news that the UK economy returned to growth in August may also not be enough to reignite the pound against the dollar.
“While there are some pockets of good news in the UK economic data, the UK economy can not compete with the US economy on the growth front,” XTB’s Kathleen Brooks said.
“This growth differential could lead to a dollar positive yield differential down the line, and there is now a growing chance that the Fed may pause in November while the Bank of England cuts rates.”
IPO market to remain constrained until 2025 - Peel Hunt
Activity across Britain’s initial public offering (IPO) market is expected to remain muted over the remainder of the year before picking up in 2025, according to Peel Hunt (LON:PEEL).
Analysts from the investment bank noted post-summer IPO activity had been constrained as companies avoided volatility around the UK’s looming Budget and the presidential election in the US.
Rosebank Industries PLC (LON:ROSE) and Aberforth Geared Value & Income Trust PLC were the only companies to list in London over the third quarter, joining the AIM and main market respectively.
This meant just 10 companies listed in the first nine months of 2024, drumming up a total of £584.6 million, down 47% compared to the same period in 2023.
Peel Hunt reported its IPO Speedometer had slowed from 29 to 27 miles per hour between August and September, indicating the market was “selectively open”.
A number of companies were said to be holding early-stage meetings or in the process of gearing up for IPOs though, Peel Hunt said, leaving a bounce back expected next year.
Saga jumps on Ageas partnership
Saga PLC (LON:SAGA) racked up an 8.6% gain on Friday morning after unveiling talks with Ageas (LON:0Q99) over a 20-year partnership for motor and home insurance.
Under the proposed agreement, Ageas will also acquire Saga's underwriting arm Acromas for £67.5 million.
The partnership aims to enhance both companies' service offerings in the over-50s insurance market.
Ageas UK will operate Saga's motor and home insurance products, which generated gross written premiums exceeding £479 million in the year ending 31 July… Read more
Saga shares soared to 135.8p on the news, leaving it as the FTSE All-share’s biggest gainer for the day.
Gold and oil tick up on Friday
Gold and oil prices picked up again on Friday after this week brought a pause in rallies for both.
Benchmark Brent crude inched closer to the US$80 mark, with the price of a barrel climbing to US$78.67 for a 1.8% gain since Thursday morning.
Gold also accelerated higher, having ticked up by 1.1% to US$2,645 in the meantime, though this saw it remain off last month’s US$2,686 record high.
UBS analysts had forecast on Thursday that the yellow metal would top US$2,850 by mid-2025, as ongoing monetary easing globally and geopolitical tensions also buoyed oil prices ahead.
UK economy ‘a picture of slowing growth’ pre-Budget
Though gross domestic product picked up in August, the picture is one of “slowing growth” ahead of this month’s Autumn Budget, XTB analyst Kathleen Brooks has noted.
She highlighted the figures showed just some sectors enjoying “especially strong growth,” such as accountancy, retail and manufacturing, as the likes of oil production was weaker and service growth “barely budged”.
Services are “usually the mainstay of British growth,” Brooks commented, highlighting weakness in wholesale retail, alongside the arts, entertainment and recreation sector, had weighed.
“The economic backdrop to this month’s Budget is one of economic slowdown since Labour have been in power,” she continued.
“Will this make the Budget more pro-growth? Can the government’s initial doom and gloom message be blamed for the slowdown?
“Chancellor Reeves would be wise to use this Budget to boost UK economic growth, however, she has an almost impossible balancing act to perform.”