“The spigot has been opened since it attained its new record high and the FTSE 100 continued to flow higher on Tuesday amid a raft of corporate announcements,” says Russ Mould, Investment Director at AJ Bell.
“The index took its cue from gains on Wall Street with the next key test of the relative optimism displayed by the market coming tomorrow with the latest meeting of the US Federal Reserve.
“While the Fed is expected to maintain the status quo on interest rates, commentary on its current thinking on the trajectory of rates in the remainder of the year will likely have a significant impact on markets.”
HSBC
“It’s a surprise to see Noel Quinn announce plans to step down as chief executive of HSBC. It felt like he was on a roll with efforts to simplify the group and improve returns. He is getting out while the going is good, destined to be seen as the man who fixed HSBC and positioning himself as a go-to person for strategic advice.
“Plans to pursue a ‘portfolio career’ essentially mean he is going to be a non-executive director on multiple companies. There will no doubt be a queue of companies lining up to hire him.
“The average length of tenure for a FTSE 100 CEO is around five years, according to analysis by AJ Bell of individuals currently in the role. Quinn has been in the top job at HSBC for just under five years, so not out of kilter with current trends.
“Quinn is the second longest serving FTSE 100 banking CEO currently in the role, albeit trailing Bill Winters from Standard Chartered by some margin as the latter has led the Asia-focused bank since June 2015. In third place is Charlie Nunn who has run Lloyds since August 2021, followed by C.S. Venkatakrishnan at Barclays since November 2021 and Paul Thwaite who has been in the top job at NatWest for less than a year.
“It’s been a rollercoaster ride for Quinn. First, he became interim boss in 2019, trying to steady the ship after it was navigated off course by predecessor John Flint. Covid then struck and Quinn had to guide the bank through a pandemic that turned the world upside down.
“While a rapid increase in inflation led to higher interest rates which is beneficial for the banking sector and HSBC’s net interest margins, Quinn still had to deal with plenty of business and consumer customers facing extreme financial pressures.
“It would have been easy to sit tight and try and ride out the uneven market backdrop, yet Quinn pressed ahead with a plan to sharpen the bank’s focus on Asia and pull out of certain other geographies.
“In true form for the banking sector, HSBC’s results are full of adjustments because of its ongoing asset disposal programme. A special dividend had already been trailed by the bank, but of positive note for shareholders is a bigger than expected share buyback worth $3 billion.”
Prudential
“Shares in Asia-focused insurer Prudential were under pressure after a decidedly mixed first-quarter update. While there was evidence of a recovery in some key markets, its mainland Chinese venture CITC Prudential Life saw a significant year-on-year decline in sales.
“Regulatory impacts tempered the momentum in Indonesia where the company has previously seen robust levels of demand.
“While the less mature nature of these markets in terms of financial services creates opportunities for growth, Prudential’s recent experience offers a reminder that this comes at the cost of greater volatility and complication.”
Glencore
“Glencore has been quiet on murmurs it might join the race to buy Anglo American, however its first quarter production report is a good reminder of how it is a big player in the copper space and how buying the rival would make it an enormous one.
“It’s fair to say that Glencore is one of the most ambitious companies in the mining sector. With its fingers in multiple pies thanks to having a commodities trading division as well as a traditional mining arm, Glencore wants to be the biggest and the best.”
Whitbread
“Hotels are where it’s at right now for Premier Inn owner Whitbread. The company’s decision to slash jobs and sites for its chain of branded restaurants, and even convert some restaurants into hotel rooms, looks logical. It makes sense for the company to focus on what it is good at.
“Brewers Fayre and Beefeater are arguably not strong enough brands to perform against a difficult consumer backdrop and in a competitive casual dining market. Whitbread should have scope to reemploy at least some of the staff affected by the restaurant cuts in its hotel operation.”
“Premier Inn is well-positioned as it offers affordable and reliable accommodation for people looking for an inexpensive trip away or someone travelling for business. The company has endured a sluggish start to the start of the current financial year – although it remains positive on the outlook. Significantly, the company has achieved a meaningful narrowing in losses from its nascent German operation.”
Card Factory
“Card Factory is demonstrating there is still a place for shop selling greetings cards and birthday balloons on British high streets, particularly if the price is right.
“The reinstatement of dividends is a clear indication of the company’s confidence and has made the market sit up and take notice of the story.
“Card Factory has been a beneficiary of the woes of rival Clintons and the exit of Paperchase as a standalone entity, even if the latter serves a more premium market.
“To its credit, Card Factory has carved out a value-focused niche for itself which is resonating with customers who are having to watch every penny.
“The company does face headwinds like the impact on costs from the increase in the National Living Wage but it has demonstrated an ability to run the business with efficiency and this should stand it in good stead moving forward.”
These articles are for information purposes only and are not a personal recommendation or advice.
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