Pru logo on laptop
Investors send Pru stock up more than 5% on buyback plans / Image source: Adobe

Equities in London traded mixed at the start of the week, with some US tech sector nerves hurting sentiment, with eyes turning to elections in the UK and France as polling day edges ever closer.

The FTSE 100 index traded 7.66 points higher, 0.1%, at 8,245.38. The FTSE 250 was down 50.12 points, 0.3%, at 20,392.23, though the AIM All-Share fell 0.41 of a point, 0.1%, at 772.16.

The Cboe UK 100 rose 0.1% to 820.38, the Cboe UK 250 lost 0.2% at 17,744.56, and the Cboe Small Companies was 0.1% lower at 16,897.59.

In European equities on Monday, both the CAC 40 in Paris was up 0.3% and the DAX 40 in Frankfurt was rose 0.1%.

In New York on Friday, the Dow Jones Industrial Average edged marginally higher, though both the S&P 500 and Nasdaq Composite lost 0.2%.

In Tokyo on Monday, the Nikkei 225 ended up 0.5%. In China, the Shanghai Composite fell 1.2%, while the Hang Seng in Hong Kong was 0.4% lower. In Sydney, the S&P/ASX 200 ended down 0.8%.

US tech sector nerves kept enthusiasm to a minimum at the start of the week. Nvidia shares fell 4.0% last week.

‘Is this a brief hiccup, or the start of some air being let out of the balloon? Interestingly our very prescient equity strategists have put out a note over the weekend arguing for a breather in US markets partly due to stretched positioning and a buy back black-out starting next week ahead of Q2 earnings,’ Deutsche Bank analysts commented.

The pound was quoted at $1.2655 early Monday, rising from $1.2628 at the time of the London equities close on Friday. The euro stood at $1.0712, up from $1.0685. Against the yen, the dollar was trading at JP¥159.69, up from JP¥159.52.

In the UK, it is the final full week of campaigning before the July 4 general election. UK Prime Minister Rishi Sunak will warn that it would take decades to recover from the ‘disaster’ of a Labour government as he seeks to rally Tories to fight for every vote in the closing stages of the campaign.

The PM will tell activists they have just 10 days to ‘take our message to every corner of the UK’ before polls open a week on Thursday.

With the Conservatives still around 20 points behind in the polls and after a bruising few days dominated by allegations about alleged insider betting, Sunak will urge Tories not to ‘surrender’ to Keir Starmer’s party.

Over in France, President Emmanuel Macron on Sunday vowed a ‘change’ of governing style regardless of who wins the snap elections he called, as fresh polls indicated his centrist party may once again be trounced by the far right.

Despite the prospect of a hung parliament, Macron insisted he would finish out his term until 2027, defying calls from opponents to step down in case the far-right National Rally, or RN, comes out on top.

‘The goal cannot be to just continue as things were,’ Macron said in an open letter published in French media. ‘I have heard that you want change.

‘You can trust me to act until May 2027 as your president, protector at every moment of our republic, our values, respectful of pluralism and your choices, at your service and that of the nation,’ he added.

Marine Le Pen, the National Rally’s figurehead, said Saturday that Macron’s resignation could be the only solution to avoid a lame-duck presidency for the remaining three years of his term.

Her comments came as two new opinion polls released showed the RN with 35-36% of voting intentions as the first round looms on June 30. They lead a left-wing alliance at 27-29.5%, with Macron’s centrists in third at 19.5-22%.

Away from politics, US data will be in focus this week, with a gross domestic product reading on Thursday and the latest personal consumption expenditures data on Friday.

ING analyst Francesco Pesole commented: ‘If the US May core PCE on Friday does come in at the consensus 0.1% month-on-month, the short-term downside for the dollar against European currencies may be less pronounced as markets could still favour defensive positions ahead of the French vote on Sunday. When taking EU political noise out of the equation, though, PCE data should in our view feed into an increasingly dovish Federal Reserve narrative this summer, culminating with a September rate cut. This is why we remain generally bearish on the dollar for the end of next quarter.’

In London, Prudential shares rose 5.1%, the best large-cap performer. The Asia-focused insurer announced a $2 billion share buyback programme.


The firm said the buyback will be completed by no later than mid-2026.

Chief Executive Anil Wadhwani commented: ‘I am pleased with the progress we continue to make in executing our strategy, as we drive towards generating growth in both value and cash returns for shareholders over the long term. The significant growth opportunity ahead of us has not changed and we remain focused on realising that opportunity.’

The CEO said that Prudential’s progress towards its financial goals can ‘increase the potential for further cash returns to shareholders’. Wadhwani added that the firm’s dividend policy is unchanged, with it still targeting annual growth in the 7% to 9% range.

Prudential’s annual premium equivalent ‘sales trends’ in the second-quarter as similar to the first, it added. They had risen 4.2% on-year in the first-quarter, or 7.3% at constant currency.

THG added 1.5%, while Frasers climbed 0.8% as the duo unveiled a tie-up. The duo will partner ‘across several areas’.

E-commerce firm THG’s Ingenuity offering will provide Frasers with ‘courier management services and re-platforming the Frasers Group’s Australian fulfilment and logistics operations’. The Frasers credit and loyalty platform, Frasers Plus, is integrated into Ingenuity. In addition, a selection of THG’s Myprotein products will be launched instore at Sports Direct.

‘The launch across Sports Direct stores further supports the success of the recent rebrand and the offline growth potential of the brand. Launching collaboration products through Sports Direct further broadens the Myprotein brand appeal, bringing the rapidly growing Hyrox community to both Myprotein and Sports Direct alike,’ THG added.

THG said it has agreed to sell its portfolio of luxury goods websites, including fashion site Coggles, to Frasers.

THG left its annual outlook unchanged as ‘positive momentum’ at the end of last year continued in the first half of this one. On current trading, THG said the second-quarter will represent the ‘third consecutive quarter of year-on-year revenue growth’.

Britvic shares rose another 7.6% as suitor Carlsberg weighs up its next move. The brewer, whose attempts so far at acquiring the FTSE 250-listed soft drinks maker have been rebuffed, reported an agreement with PepsiCo.

Carlsberg said PepsiCo has agreed to waive the change of control clause in bottling arrangements it has with Britvic.

‘This waiver will come into effect should an acquisition of Britvic by Carlsberg, which has the recommendation of Britvic’s board, proceed to completion. Carlsberg is considering its position. There can be no certainty that any offer will be made,’ Carlsberg added.

The Times reported Friday that Carlsberg is preparing a third bid for Britvic, upping the ante to £3.58 billion. Its most recent proposal, which valued Britvic’s issued and to be issued equity at £3.20 billion, was deemed unsatisfactory by the London-listing’s board.

A barrel of Brent oil was quoted at $84.41 early Monday, down from $85.73 at the time of the London equities close Friday. Gold was quoted at $2,330.34 an ounce, rising from $2,326.10.

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Issue Date: 24 Jun 2024