August 30, 2016

Pegler’s market report – 30.08.16: Markets await Janet Yellen’s Jackson Hole speech

by David Pegler

in Insights Press Releases

As published in the Brighton Argus (30.08.16) Business on page 21 under the title Pegler’s Market Report:

Markets await Janet Yellen’s Jackson Hole speech

Global stocks traded with little direction prior to Friday’s Jackson Hole speech. Markets then regained some poise after Janet Yellen, the Federal Reserve Chairwoman, said the case for a US rate hike has strengthened in recent months.

BHS will disappear from high streets across the country this weekend when it pulls the shutters down on its 22 remaining stores, drawing an end to nearly 90 years as a stalwart of town centres across Britain. BHS’ collapse into administration last April has cost 11,000 jobs and left 22,000 pensions in the lurch, prompting a lengthy parliamentary inquiry into its former boss Dominic Chappell, as well as one-time owner Sir Philip Green.

Jaguar Land Rover’s revenues surged but earnings declined in its latest quarterly results, highlighting the investment the UK-based company has made in new models and changes in the Chinese market. In the three months to the end of June, retail sales rose 16pc to 132,743 vehicles compared with the same period a year ago, driving up revenues by 9.2pc to £5.45bn.

Pizza Express sales jumped 14.1pc in the past year as appetite for Italian-style pizza among diners in Asia helped counter a “challenging market environment” in the UK. The British restaurant chain said group sales hit £488m in the 52 weeks to June 26, boosted by opening 18 new UK restaurants and 17 in its rapidly-growing Asian markets. Despite launching a new range of supermarket pasta and gluten-free pizzas, and a home delivery tie-up with takeaway app Deliveroo, the chain failed to stem a decline in sales in its home market, where it owns around 450 restaurants.

On the mid-cap index, shares in Entertainment One suffered their sharpest fall since December last year after ITV withdrew its proposal to buy the Peppa Pig maker.

On the flip side, Playtech shares rose strongly after it announced a €150m special dividend. The gambling technology company also said it has “a strong pipeline of M&A targets”, posting revenue growth of 11pc in the first half of the year.

Legal & General, the UK’s biggest pension fund manager, has come out swinging against Sports Direct by revealing it will vote against the retailer’s chairman and all its non-executive directors at the sportswear chain’s meeting next month. It will be the third consecutive year the largest investor in UK companies has voted against the group’s senior management, and since that time Sports Direct’s shares have more than halved.

By David Pegler, Brighton Capital Management