FTSE 100 Live May 16: China reveals Covid hit economy, Vodafone shares rise

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April inflation could hit 9.2%, economists say

Deutsche Bank has suggested that April inflation could hit 9.2%, a new record high, when figures are released later this week.

In March, prices rose by an average of 7% a year, a new high in 30 years, according to the Office for National Statistics.

But the rise in Ofgem’s price cap for energy bills, together with rising wages in the new financial year and already higher prices, could push inflation to new multi-decade highs, the authorities suggested. bank economists.

A note to investors said Deutsche Bank expected “high price volatility as seasonal price changes and more inflation-linked price increases are triggered.” Inflationary pressures will remain “broad”, they said.

They anticipate a sharp rise in service-related inflation as housing costs increase in the rental and ownership sectors, and the cost of travel and leisure increases.

While household energy bills are expected to rise further this year, Deutsche Bank said the consumer price index (CPI) for energy could jump 52% ​​year-on-year.

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Shares of Tesco and Sainsbury’s jump on cash yield forecast

Shares of Tesco and Sainsbury’s rose this morning on the bank of a Barclays rating which suggested the two supermarkets were currently undervalued and offered a good prospect of cash returns for shareholders.

Tesco rose 1.08% midday to 284.24p, while Sainsbury’s jumped 1.34% to 242p after analysts set price targets of 325p on Tesco and 300p on Sainsbury’s.

“Over the next three years, we expect Sainsbury’s to provide the highest free cash flow yield, but Tesco to provide the highest cash yield to shareholders,” the note said.

It was a quiet morning in UK markets, with the FTSE 100 virtually unchanged by midday at 7,420.87.

Miners led the way as winners, with Fresnillo up 3.32%, Glencore up 2.59% and Antofagasta up 2.34%.

The French CAC and German Dax indices are down slightly.

The pound is currently worth just under $1.23 and nearly €1.18.

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McDonald’s faces $1.4 billion as it leaves Russia after 30 years

McDonald’s said it would pull out of Russia after more than 30 years of doing business in the country and set aside $1.2 billion to $1.4 billion for the move.

The burger and milkshake vendor has begun a process to sell the Russian business after it temporarily closed its restaurants there, the company said in a statement on Monday.

Read the full story here.

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‘Brinkmanship’ over Northern Ireland protocol could hurt gilt market, analyst warns

As Boris Johnson holds talks in a bid to break the deadlock over the Northern Ireland protocol, a Bank of America analyst has warned that ‘specificity’ on the issue could hurt foreign interests in debt obligations. British state.

Mark Capleton said that while foreign demand for gilts appears to be in “poor health”, partly thanks to a resurgence of other global imbalances, there are risks ahead.

The tension around the Northern Ireland protocol to the Brexit treaty is a “major concern”, he wrote in a note on Monday.

“Since this has been simmering for a long time, the market seems to assume that the threat to override large parts of the protocol is just a dead end,” he said.

“If the Prime Minister increased the threat, the market would quickly come to treat the increased risk of a trade war with the EU as a risk of stagflation.”

The UK depends on foreign investors buying government bonds to fund its budget and current account deficits.

In the past, foreign investors have tended to suspend their purchases of gilts when they worry about the depreciation of the British currency, such as during the financial crisis.

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Made.com shares fall on earnings scare and CFO exit

Made.com lost a fifth of its value today after the online furniture retailer reversed an earlier forecast of making profits this year and announced the departure of its chief financial officer.

Shares fell 22% in early trading after the company posted a 10% drop in first-quarter sales. Made has been impacted by lower consumer demand and supply chain disruption.

The retailer has warned that supply chain issues will see revenue drop by £5million this year and said losses could reach £35million for 2022. In March, the company predicted a profit .

Read the full story.

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Banks ‘lift drawbridge’ on small business loans

The UK’s biggest business group has warned that banks are ‘raising the drawbridge’ for small businesses and stifling economic growth, as successful funding applications fall to an all time low.

The Federation of Small Businesses (FSB) found that less than one in ten small businesses applied for funding in the first quarter of 2022, the lowest proportion since its records began.

Of these, only 43% had their applications approved, less than at any other time.

Read the full story.

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FTSE 100 recovers ground, power companies up

Vodafone’s struggling share price surged today after an Abu Dhabi-based telecommunications group snapped a 9.8% stake in the mobile giant.

In a nudge for under-pressure Vodafone boss Nick Read ahead of tomorrow’s annual results, the new backer is not seeking board representation and has declared its support for management and current strategy.

Emirates Telecommunications Group, otherwise known as e&, paid a premium of around £3.3bn for its ‘mutually beneficial’ investment. His boss Hatem Dowidar ran Vodafone’s Egyptian operations.

The London-listed company, whose shares rose 3% or 3.8p to 121.62p, said it was looking forward to building a long-term relationship with its new largest shareholder.

The move, which extends deals in the sector after French billionaire Patrick Drahi’s 18% stake in BT, contributed to a steady session for the FTSE 100 index.

The first flight was 8.92 points higher at 7427.07, having initially been as low as 7361 after disappointing data from the Covid-stricken Chinese economy showed pressure on retail sales and industrial production.

A warning from former Goldman Sachs chief executive Lloyd Blankfein that the U.S. recession is a “very, very high risk” added to the earlier pessimistic mood.

Amid an increasingly uncertain demand outlook, mining stocks Antofagasta and Glencore managed a 3% rally and Asia-focused Prudential rose 1.5%.

The FTSE 250 also recovered from a weak start to climb 40.14 points to 19,962.03, driven by gains of more than 3% for power companies Drax and Centrica after regulator Ofgem ruled. said it would consider reviewing the energy price cap every three months.

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National Express says its Stagecoach offer remains the best

National Express will not sweeten its offer to buy rival Stagecoach despite being eyed by German asset manager DWS.

National Express said its share offer for Stagecoach, which values ​​the company at £445million, was “complete and fair”. He continues to believe that a merger would create more value for investors than a sale.

Stagecoach agreed to merge with National Express in December but withdrew support for the deal after DWS tabled a cash offer of £595million in March.

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Saudi oil profits soar

Saudi Arabia made nearly half a billion dollars in profit every day in the first three months of the year as soaring oil prices swelled its coffers.

Saudi Armaco, the state-owned giant and the world‘s largest oil company, reported a profit of $39.5 billion in the first three months of the year, nearly double the $21.7 billion dollars made in the same period a year earlier.

The company announced an $18.7 billion dividend based on what it called “outstanding” results.

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