Opposition parties appear to have agreed to block an election taking place in October, which helped the pound hold its gains at a five-week high against the US dollar. The FTSE 100 index opened lower and continued sideways for the rest of the day. Trade tensions eased after the US and China agreed to hold high-level trade talks next month.
Oil impact
Both Shell and BP’s shares fell this morning after think-tank Carbon Tracker stated that investment plans by Royal Dutch Shell, BP and ExxonMobil, among others, will not be compatible with the 2015 Paris Agreement. With concern for the planet at the heart of world negotiations, I don’t think this bodes well for these oil major’s share prices.
In other Shell news, it agreed to buy Norwegian oil and gas assets from Exxon Mobil for up to $4bn.
Emerging markets
Ashmore Group (LSE:ASHM), an emerging market fund manager, posted a 10% rise in its full-year core profit. This was slightly below forecast, but its shares rose 2% this morning. In the year to June, Ashmore grew its assets under management by 24% to $91.8bn due to increased inflows and positive market movements. The group manages money for institutional and retail clients in emerging markets, incorporating equity, debt, multi-asset and alternative funds.
The group has been wary about the effect the US-China trade war could have on the world economy but believes China is well placed to withstand the tariffs the US is imposing. Ashmore has exposure to Argentina, where the market is in turmoil, but finance director Tom Shippey said, “the political situation could create opportunities for active managers.” Ashmore is also interested in the possible Saudi Aramco IPO but would only get involved if the price was right.
I am encouraged by these results and Ashmore’s determined outlook, but I consider this a high-risk investment for beginners.
Berkeley Group
Housebuilder Berkeley Group said it has been facing robust market conditions with stable pricing (during the first four months of its financial year) in London and the South East of England. This is surprising but encouraging given the ongoing chaos and worry caused by Brexit.
Greene King
Greene King, brewer of Old Speckled Hen and Abbot Ale, continues to prepare for a proposed £4.6bn takeover by Hong Kong’s richest man Li Ka-Shing. Today the company stated comparable sales at its pubs rose 1.5% over the last seven weeks. Its share price gained 0.1%.
Dunelm
Household goods retailer Dunelm Group (LSE:DNLM) posted its full-year results a few days ago and along with a 35% profit increase, announced a special dividend of 32p for October. The good news didn’t stop there. Earnings per share rose 38% to 50.2p as revenue jumped 5% to £1.1bn.
The company is still cautious about its full-year outlook due to Brexit worry and the impact on consumer spending. However, analysts continue to see this stock as a Buy and believe continued like-for-like growth is achievable.
Social media star and influencer Mrs Hinch is also thought to have contributed to the increase in Dunelm’s product sales as her housekeeping advice and product recommendations are avidly followed by fans. Brexit has created desperate times for High street retailers, so I find it heartening that Dunelm is producing such great results.
This afternoon the share price was up a further 4.9% as positive sentiment continued to reach shareholders.
