Weekly review

The FTSE 100 ended the week down 43.53 points, or by 0.55%, closing at 7,870.57 on Friday.

Equity view

Manufacturing company Morgan Advanced Materials hiked its full-year dividend payout on Friday as it revealed annual pre-tax profits had risen. Morgan Advanced Materials said reported revenues had risen 17% in 2022 to £1.11bn, boosting reported group adjusted operating profits 21.3% to £151.0m.

Corrugated packaging company Smurfit Kappa reported a rise in first-quarter profit on Friday even as sales dipped. In the three months to the end of March, pre-tax profit rose 7% to €339m, while earnings before interest, tax, depreciation and amortisation grew 13% to €579m. Revenue nudged 1% lower to €2.99bn.

Education publisher Pearson said it was on track to meet annual guidance and announced a £300m share buyback to start in the second half of the year as underlying group sales rose 6%.

Shares in NatWest fell in early London trade despite the UK bank reporting better-than-expected first-quarter profit driven by higher interest rates, although there was a sharp drop in deposits as customers chased better rates as incomes were squeezed by rising inflation.

Education publisher Pearson said it was on track to meet annual guidance and announced a £300m share buyback to start in the second half of the year as underlying group sales rose 6%.

Computacenter said on Friday that it expects to see growth in profitability in 2023 as demand remains strong. The company said in an update that the strong revenue growth seen in 2022 continued in the first quarter to the end of March 2023.

Prudential posted a jump in first-quarter sales on Friday as it benefited from the easing of Covid curbs in China. The Asia-focused insurer said that APE sales rose 35% to $1.56bn, driven by increasing cross border traffic from the Chinese Mainland and higher domestic demand in Hong Kong, alongside growth in many of its other business units.

Barclays said it was on track to meet full-year guidance as it posted a 16% jump in pre-tax profits driven by growth across all its businesses. The bank on Thursday said group income rose 11% to £7.2bn, with pre-tax profit coming in at £2.6bn, generating a group return on tangible equity of 15% and earnings per share of 11.3p. Shares in the lender gained 5% in London trade.

Consumer goods giant Reckitt Benckiser announced the appointment of a new chief executive on Wednesday as it posted a better-than-expected rise in first-quarter sales amid price hikes.

Power generator Drax on Wednesday launched a £150m share buyback and said it was suspending carbon capture projects pending further talks with the government on subsidies. It also emerged that the company was also under investigation by industry regulator Ofgem to see if it complies with sustainability rules, after a media stated its own scientific advisers had suggested it should stop calling its output from wooden pellets carbon neutral.

Persimmon posted a slump in first-quarter completions on Wednesday but said it expects full-year 2023 volumes to be towards the top end of guidance following an improvement in sales rates since the start of the year.

Vodafone’s biggest shareholder, Emirates Telecommunications Group, has upped its stake in the London-listed firm and opened talks to push for changes on its board. In a regulatory filing on Monday, Emirates Telecommunications - also known as e& - said it had lifted its stake in Vodafone to 14.6% from 14%.

Premier Inn owner Whitbread on Tuesday said full-year earnings had soared above pre-pandemic levels on the back of strong demand for hotel rooms after the lifting of Covid-19 travel restrictions and unveiled a £300m share buyback. The company, which also owns the Beefeater steakhouse chain, reported pre-tax profit of £375m, up from £58m a year ago and £218m in 2020 before the pandemic shut down the leisure and hospitality sectors.

Fast fashion firm Asos has been targeted by shortseller ShadowFall, according to reports. According to The Sunday Times, the hedge fund has taken a short position in the retailer worth around £4m, making it the second most shorted stock in the FTSE 250.

Economic news

A group of heavyweight trade associations are in discussions to fill the gap left by the crisis engulfing the CBI, it was reported on Friday. According to Sky News, trade bodies including the British Retail Consortium, Energy UK, UK Hospitality and the Society of Motor Manufacturers and Traders have held a series of discussions this week.

UK business confidence reached a near one-year high in April, a survey showed on Friday, although prices were still forecast to rise.

Activision Blizzard shares tumbled in pre-market trade on Wednesday after the UK’s Competition and Markets Authority said it will block the company’s $69bn takeover by Microsoft.

UK retail sales edged higher in April, a survey showed on Wednesday, although retailers remained cautious. According to the latest CBI Distributive Trades Survey, sales volumes in the year to April edged higher, with the weighted balance rising to +5 from +1 in March. Sales were also seen as good for the time of year, with a balance of +21, up from +12.

Heathrow posted a first-quarter loss on Wednesday, despite seeing passenger numbers take off. The airport - Europe’s busiest - said revenues in the three months to 31 March were £814m, a 58% jump on the same period a year previously, while passenger numbers surged 74% to 16.9m.

Output across the UK manufacturing sector fell over the last three months, a closely-watched survey showed on Tuesday, but price pressures started to ease. According to the latest CBI Industrial Trends survey, the output volumes balance fell sharply in the three months to April, from -6 in March to -15, the lowest since July 2020. Output fell in 13 of the 17 sub-sectors, with the decline driven by motor vehicles and transport equipment.

A series of measures are being introduced to crack down on money laundering through Post Offices, it was announced on Monday. The Financial Conduct Authority said “hundreds of millions” of pounds were estimated to be laundered through the cash deposit channel at the Post Office each year.

Growth in UK house prices eased in April, according to the latest house price index from Rightmove. On a monthly basis, average asking prices rose by just 0.2% to £366,247, down from 0.8% growth in March and lower than the average of 1.2% at this time of year.

International events

US personal incomes grew a tad more quickly than expected during the previous month, but spending was unchanged. In parallel, prices eased back albeit slightly less quickly than anticipated. According to the Department of Commerce, in seasonally adjusted terms personal incomes rose by 0.3% in March (consensus: 0.2%), while personal consumption expenditures were flat (consensus: -0.1%).

German inflation fell a little more than expected in April, according to preliminary figures released on Friday by Destatis. Headline inflation declined to 7.2% from 7.4% in March, versus expectations for a drop to 7.3%. Meanwhile, HICP inflation fell to 7.6% in April from 7.8% in March, compared to consensus expectations of 7.7%.

The eurozone economy grew at a slower rate than expected in the first quarter, according to preliminary figures released on Friday by Eurostat. The eurozone economy expanded by 0.1% quarter-on-quarter, which was a touch below consensus expectations of 0.2% growth. Compared with the same quarter a year earlier, GDP grew 1.3%, following 1.8% growth in the previous quarter.

The Bank of Japan on Friday left interest rates unchanged after the first policy meeting chaired by in new governor Kazuo Ueda and announced a policy review of its easing measures. The move was in line with economist expectations of the rate staying at -0.1% since the central bank took rates below zero in 2016. It also kept the tolerance range for 10-year Japanese government bonds unchanged at 50 basis points above and below its target of 0%.

First-quarter profits came in ahead of expectations at Santander, the Spanish banking group confirmed on Tuesday, after a strong performance in Europe offset weakness elsewhere.

Watches of Switzerland surged on Tuesday after markets blog Betaville said in an "uncooked alert" that the company was at the centre of takeover speculation.

Activist investor Trillium Capital has offered to buy Getty Images in a $3.95bn deal. On Monday, Trillium - which owns more than 500,000 shares in Getty - announced a non-binding proposal at $10 a share in cash. This is a premium of just under 98% to the closing share price on Friday.