News & Insight • Weekly Newsletters

21 April 2023 | William Buckhurst

That Was The Week That Was

MACRO

• UK inflation data continued to come in higher than expected. March CPI was up 0.8% on the month vs. 0.5% expected with year-on-year CPI at 10.1%
• Meanwhile, British business activity last month, according to the S&P/Cips global flash UK PMI, rose at its fastest pace in a year
• Japan's core consumer prices rose 3.1% in March from a year earlier, data showed on Friday, staying above the central bank's target of 2% as companies continued to pass on rising costs to households
• Official Chinese data showed that GDP rose by 4.5% annualised in the first quarter, ahead of most economists’ expectations

COMPANY NEWS

• ASML reported first quarter results that continued to beat expectations, but management commented that some customers were delaying orders
• American Express grew revenues 22% year-on-year but made provisions for credit losses of $1.06bn, around 12% higher than expected
• Procter & Gamble shares rose after sales received a boost from higher prices across its portfolio of consumer products
• Tesla missed Wall Street expectations in the first quarter and gross margins dropped significantly after the company rolled out a series of recent price cuts
• We sadly lost Anglo-Aussie Dame Edna/Sir Les Patterson creator Barry Humphries. There was no time for laughter as fellow multi-cultural company, BHP Billiton, announced their own “hello possums”. “Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand,” said BHP chief executive officer Mike Henry
• Qinetiq, the defence company, announced resolute results with some optimistic tones on new orders
• Melrose finally demerged the auto business Dowlais
• Lidl won a High Court battle with Tesco over its trademark yellow circle logo back

GAMING WATCH

Sega, of Sonic the Hedgehog fame, is buying Angry Birds mobile developer Rovio for $776m, less than the $1bn price that was previously being rumoured. It is yet another example of a large-scale mobile developer being scooped up by a bigger, traditional brand, albeit with a much lower price tag than other deals.  Since Angry Birds’ release in 2009, there have been 23 different versions of Angry Birds including two Star Wars crossover, a Transformer tie-in and a VR/AR project called Isle of Pigs

SMALL CAP NEWS

Volex, the electrification and cabling specialists, announced they are trading ahead of expectations ($710m revenue) with increased margins due to strong organic growth in EV, Complex Industrials (incl. Datacentres) and offsetting weakness in the Consumer Electronics market. It sounds like they are fully in line to meet the management 5-year strategic plan that targeted $1.2bn of revenue by FY2027

Kistos Holdings, led by Andrew Austin, stated it has reached a conditional agreement to acquire all of Mime Petroleum which will add to reserves and immediate production as it diversifies into Norway

Lastly, the THG – previously known as The Hut Group – was approached by Apollo for takeover as we see some M&A action beginning to hot up (finally in 2023!)

THIS WEEK IN HISTORY

• 1982: S&P 500 index futures contracts begin trading on the Chicago Mercantile Exchange for the first time
• 1989: Protestors start building up in Tiananmen Square, the Hong Kong stock market fell by more than 22% on the first days of trading after the massacre two months later

IN OTHER NEWS

According to the UN’s Population Dashboard, India’s population will surpass 1,428bn, just overtaking China’s 1.425bn, in June. The US, a distant third at 340m. The Indian population looks to peak in 2064 at 1.7bn before falling to 1.53bn by 2100. The UN PD predicts the Chinese population will have shrunk to 0.77bn at that time.

MARKET DATA

As at 21^st April 2023. Source: FactSet

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