UK Gilt Yields Stay High as Investors Lose Confidence in UK

UK Gilt Yields Stay High as Investors Lose Confidence in UK

1149 GMT - U.K. gilt yields have risen considerably in recent days and remain at elevated levels due to investors' loss of confidence in the U.K, Rabo Research says in a note. In addition, the increasingly unpredictable Bank of England's interest-rate path has contributed to the rise in gilt yields, Rabo says. "Higher gilt yields, weaker currency [are] being driven by the combination of a loss of confidence in UK plc and significant uncertainty (and therefore term premium) about the development of the BoE's rate path going forward," Rabo says. In the past month, the U.K. 2-year gilt yield is up 93 basis points and last trades at 4.973% while the U.K. 10-year yield is up 29bps and last trades at 4.346%, Tradeweb data show. ([e-mail])

COMPANIES NEWS:

Saga Sees Higher FY 2024 Underlying Profit on Continuing Cruises, Travel Momentum

Saga said Tuesday that it expects its year-end underlying profit to be well ahead the previous fiscal year as it continues to benefit from momentum at its cruise and travel businesses.

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Bidco to Buy Lookers in GBP465.4 Mln All-Cash Deal

Lookers said on Tuesday that it had agreed on terms for a takeover through a recommended all-cash offer by Bidco valuing the U.K. car dealership at 465.4 million pounds ($595.4 million).

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SThree 1H Net Fees Sipped Against Tough Comparative; Contract Net Fees Rose 3%

SThree said Tuesday that net fees on a constant-currency basis for the first half of fiscal 2023 fell 2% against a strong post-pandemic comparative and amid an uncertain macroeconomic environment, and that contract net fees were up 3% on year.

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Lords Group Trading Sees Fiscal 2023 Performance in Line With Market Expectations

Lords Group Trading said it maintains expectations for its fiscal 2023 performance in line with the market despite a persistently negative macroeconomic environment.

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Somero Enterprises Shares Fall on Lower 1H, 2023 Revenue Due to US Market Issues

Shares in Somero Enterprises fell Tuesday after it said it expects revenue for the first half and full-year 2023 to be below the year-prior comparatives due to factors affecting the U.S. market, and that it expects revenue in the second half to improve.

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Conroy Gold & Natural Resources to Raise GBP400,000 for Gold Exploration Programs

Conroy Gold & Natural Resources said Tuesday that it will raise 400,000 pounds ($511,760) via a discounted share placing and will use the funds to accelerate gold and other minerals exploration programs in Ireland and Finland.

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Capital Metals Shares Drop on Plans for Discounted Placing to Raise GBP500,000

Shares in Capital Metals dropped on Tuesday after the miner outlined plans to raise gross proceeds of 500,000 pounds ($640,155) through a placing of shares in order to resolve license issues.

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Abrdn Sells Remaining GBP337 Mln Shareholding in HDFC Asset Management

Abrdn on Tuesday said that it has sold 21.8 million shares in HDFC Asset Management Co. for 337 million pounds ($431.2 million) and that it will return most of the proceeds from stake sales to shareholders.

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Gear4Music Trades Lower After Swing to Pretax Loss in FY 2023

Shares in Gear4music fell on Tuesday after the company swung to a pretax loss in its fiscal year 2023 as market conditions continue to be challenging.

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Bidstack Shares Fall on Widened 2022 Pretax Loss, Lower 1H Revenue for Current Year

Shares in Bidstack Group fell Tuesday after the company said its 2022 pretax loss widened due to higher costs, and that it expected revenue for the first half of 2023 to be below the year-prior's comparative.

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Braemar Names Grant Foley as New CFO, Starting August

Braemar said Tuesday that it has named Grant Foley as chief financial officer, effective from the first day of August, replacing current CFO Nick Stone.

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OPG Power Ventures FY 2023 Results Were in Line With Views

OPG Power Ventures said Tuesday that revenue and profit after tax for fiscal 2023 were in line with market expectations.

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Guild eSports Completes GBP622,200 Fundraise

Guild eSports said Tuesday that it has completed a fundraise of 622,200 pounds ($796,609) meant for general working capital purposes in order to drive growth and execute its existing strategy.

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C4X Discovery Chair Steps Down; CEO Named Interim Chair

C4X Discovery said Tuesday that nonexecutive chair Eva-Lotta Allan will step down with immediate effect to focus on other board roles, and named Chief Executive Officer Clive Dix as interim executive chair.

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Tlou Energy Raises $4.5 Mln via Entitlement Offer, Falling Short of Original $7.3 Mln Target

Tlou Energy said Tuesday that it raised around 6.6 million Australian dollars ($4.5 million) via an entitlement offer, below original expectations of A$10.65 million as announced on May 12.

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Standard Bank Expects Record Early 2023 Revenue Growth; Sees 1H EPS Rising

Standard Bank Group said Tuesday that it saw record revenue growth in the first five months of the year and expects first-half earnings per share to rise.

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Proton Motor 2022 Loss Widened on Slow Orders, Rising Finance Costs

Proton Motor Power Systems on Tuesday said that its losses widened in 2022 as its orders slowed down and financing costs increased and that it has extended its loan facility.

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Revolution Beauty Signals Potential Proceedings Against Founder Adam Minto

Revolution Beauty Group on Tuesday said that it has sent a letter of claim to its founder and former Chief Executive Adam Minto to recover costs incurred from alleged breaches of duties.

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Accesso Technology Group PLC Acquisition of VGS

TIDMACSO

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Frasers Group Buys Stakes in Currys, Boohoo

Frasers Group on Tuesday said it has invested in technology-products retailer Currys and online fashion retailer Boohoo Group as part of its strategy to build stakes in companies in the sector.

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PayPal to Sell European BNPL Loan Receivables to KKR, Increase Stock Buybacks

By Will Feuer

MARKET TALK:

Net Interest Income Momentum Carries Risks for European, UK Banks

1155 GMT - The dominance of net interest income momentum has boosted share prices for European and U.K. banks recently, but is now becoming a hindrance, Berenberg says in an note. The rates trade distortion is creating opportunities--with high-returning banks with waning NII momentum trading on low valuation multiples--but also short-term risks if this leads to underperformance given the apparent poor support to valuations from returns, Berenberg analysts say. "Banks' valuations have decoupled from expected returns to an extent that typically only occurs during times of crisis," they write. Berenberg says valuations will ultimately be driven by banks' sustainable returns and investors will have to navigate the disconnect and the focus on NII momentum. ([e-mail])

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Property Stocks Look Attractive Despite Uncertainty

1150 GMT - Property stocks have attractions despite concerns that valuations may have further to fall, Peel Hunt says, tweaking its recommendations on several London-listed sector players. Though valuations appeared to have bottomed out in the first quarter, that is now looking more uncertain, Peel says. Still, whilst real estate remains unpopular among investors, they appear to be preparing for further M&A and possibly considering how to position themselves when the interest-rate cycle reverses, the brokerage's analysts say in a note. Peel upgrades Great Portland Estates to buy from add, Capital & Regional to add from hold and Supermarket Income REIT to hold from reduce. It also downgrades LXi REIT to hold from buy and Tritax EuroBox to hold from add. ([e-mail])

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Potential BOE Rate Rises Unlikely to Materially Lift Sterling

1108 GMT - The Bank of England is likely to raise interest rates further from the current level of 4.5% but sterling has limited scope to rise, Unicredit Research says. "We now expect the BOE to bring rates to a peak of 5.25% in September (vs. 4.75% previously) and to start cutting rates only from the third quarter of 2024 bringing the policy rate back to 4.75%," Unicredit forex strategist Roberto Mialich says in a note. However, GBP/USD won't rise much above 1.30 in the second half of 2023 and in 2024, from 1.2764 currently, as aggressive BOE policy tightening is already priced in, he says. ([e-mail])

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Currys Gains After Frasers Stake Buy

1105 GMT - Currys shares rise 2% after Sports Direct owner Frasers Group bought an 8.9% stake in the U.K. consumer-electronics retailer. The move follows Frasers's acquisition last week of an 18.9% stake in another electrical-goods retailer, AO World. "These deals are part of Frasers's broader intelligent strategy to acquire and build stakes in other businesses with the goal of positioning itself as a consumer platform for the world's best brands," Interactive Investor head of investment Victoria Scholar writes. "Electricals and white goods could become key components of Frasers's expansion plans." Frasers shares rise 0.3%. ([e-mail])

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SThree Seen Weathering Macro Conditions on Strong Net Cash Position

1104 GMT - Recruitment company SThree's 1H dynamics show the resilience of its model, with contract net fees holding up relatively well, analysts at Liberum say in a note. The longer-term structural growth trends within the science, technology, engineering, and mathematics markets remain intact and the benefits in terms of productivity and EBIT conversion from the Technology Improvement Programme should still materialize, analysts say. Given tougher macro conditions Liberum's FY 2023 net fee income forecasts are cut by 7% to GBP417.5 million. Its cash position is expected to build to around GBP90 million given strong 2Q net cash position and further 2H capital unwind, analysts say. "The strong and better-than-expected net cash position means that SThree can weather the storm," Liberum says.

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06-20-23 0816ET